United Parcel Service, Inc. (NYSE:UPS) has issued an order for Boeing Co (NYSE:BA) cargo jets that will help it deliver more mail.
As the demand for freight planes increases, companies such as UPS are looking to meet an increasing amount of snail mail in the U.S. by spending $5.3 billion into making this a reality.
The move may come as a surprise to some as Boeing was battling against the possibility of cancelling these jets. The move puts the plane company in a good position to boost its business at a time when rivals such as Airbus Group SE have failed to gain traction in the sale of cargo planes.
The first 747-8 vehicle flew in 1969, and the jet has proven to be especially good at carrying cargo thanks to its special hinged nose. Boeing believes the plane will rise in popularity again due to the increased demand for cargo planes.
The move comes towards the end of UPS’ fiscal year, and on the same day that the company reported earnings. For its third quarter, the parcel service earned $1.44 per share, in line with Wall Street estimates.
Revenue came in at $14.92 billion, topping the consensus estimate of $14.73 billion. UPS restated its full-year expectations of diluted earnings per share in the range of $5.70 and $5.90 per share.
UPS shares slipped 0.7% Thursday, while BA stock fell 1.3%.
