By WSJ City
United Parcel Service named company outsider Brian Newman as finance chief, a move that comes as the shipping giant looks to benefit from the fallout between delivery competitor FedEx and Amazon.
UPS's stock is down 3.84% since the start of the month.
"I am very pleased to welcome Brian to UPS's senior management. He will contribute to our drive for improved growth and operating performance, and he will support our strategies focused on the long term success of the company," said David Abney, chairman and chief executive of UPS.
-- Newman is currently executive vice president for finance and operations
in Latin America for PepsiCo.
-- He will become CFO effective Sept. 16, succeeding Richard Peretz, who
plans to retire.
-- The move follows other hires from outside, showing management's
willingness to change the direction of UPS.
-- Hiring from PepsiCo makes sense because of the large trucking fleet the
-- UPS has ramped up capital spending following a period of underinvestment.
It plans to invest $7bn this year.
"What the new CFO needs to attack is reaping the benefits from the growth in online retail without driving up costs too much," said Amit Mehrotra, lead analyst for transportation and shipping at Deutsche Bank USA.
Why This Matters
UPS is in a sweet spot following a decision by rival FedEx to end its contracts with Amazon. FedEx last week said it would stop shipping Amazon packages through its ground network after earlier stopping Express deliveries by planes. That could yield a lot of new business for UPS and result not only in higher revenues but also in more logistical challenges, especially during the holiday shipping season in the fourth quarter.