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United Parcel (UPS) to Gain From Bomi Group Buyout: Here's How

United Parcel Service, Inc. UPS announced that it has decided to purchase Bomi Group, a multinational healthcare logistics provider. Subject to customary regulatory review and approval, the deal is anticipated to complete by 2022 end. Financial terms of the deal have been kept under wraps.

Since 1985, Bomi Group has provided valuable services for the Medtech and Pharma sectors, with more than 150 multinational customers worldwide.

Key Bomi Group leaders, including CEO Marco Ruini, will continue serving their respective roles even after the deal closure. Bomi Group’s employees will also continue to play important roles in the combined organization.

How Will United Parcel Benefit?

The deal is expected to expand United Parcel’s end-to-end global healthcare logistics capabilities and its expertise in Europe and Latin America.

The acquisition will bring more than 350 temperature-controlled vehicles and four million square feet (391k m2) to the UPS Healthcare global footprint in 14 countries. The deal also marks the addition of almost 3,000 Bomi Group team members to the UPS Healthcare network in Europe and Latin America.

EVP and President of UPS International, Healthcare and Supply Chain Solutions Kate Gutmann, stated, “As a leading global healthcare logistics company, Bomi enhances our portfolio of services and accelerates our journey to become the number one provider of complex healthcare logistics.”

UPS Healthcare President Wes Wheeler, stated, “We are excited to combine Bomi’s talent, expertise and capabilities with UPS Healthcare – together, we will provide unmatched solutions to our customers, powered by UPS’s integrated, global smart logistics network.”

The latest deal reflects UPS Healthcare’s consistent expansion of its network and services to meet increasing demand. UPS Healthcare has doubled its global footprint since 2020. Recent expansions include newly constructed and soon-to-be-opened dedicated state-of-the-art healthcare logistics facilities in Germany and Australia and expanded campuses in Hungary and the Netherlands.

Such expansions are expected to help UPS Healthcare serve its customers with next-generation pharmaceutical and biologic treatments that require time-critical and temperature-sensitive logistics.

Recently, UPS was in the news due to its second-quarter 2022 results. The company reported second-quarter 2022 earnings (excluding 4 cents from non-recurring items) of $3.29 per share, beating the Zacks Consensus Estimate of $3.14. The bottom line increased 7.5% year over year with strong performances across all segments. Quarterly revenues of $24,766 million also outperformed the Zacks Consensus Estimate of $24.730.3 million. The top line increased 5.7% year over year, driven by higher fuel surcharges and shipping rates.

Below we discuss second-quarter 2022 results of three other players from the transportation sector.

Delta AirLinesDAL second-quarter 2022 earnings (excluding 29 cents from non-recurring items) of $1.44 per share fell short of the Zacks Consensus Estimate of $1.71. Escalated operating expenses induced the earnings miss. Multiple flight cancellations in May and June also hurt results. The earnings miss disappointed investors, resulting in the stock shedding value in early trading. In the year-ago quarter, Delta incurred a loss of $1.07 per share when air-travel demand was not as buoyant as in the current scenario.

DAL’s revenues came in at $13,824 million, which not only beat the Zacks Consensus Estimate of $13,608.9 million and soared 94% from the year-ago quarter’s figure as air-travel demand rebounded from the pandemic lows. The uptick in air-travel demand in the United States can be gauged from the fact that 75.9% of second-quarter 2022 passenger revenues came from the domestic markets.

J.B. Hunt Transport Services, Inc. JBHT reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

JBHT’s quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year.

JBHT’stotal operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength across all segments. JBHT’s total operating revenues, excluding fuel surcharges, rose 21.2% year over year.

CSX Corporation (CSX) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.

CSX’s quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.

CSX’s total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $2,990 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge, and contribution from the acquisition of Quality Carriers. CSX’s overall revenues per unit increased 27%.


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