UPS Profits - Where does the money go?

Discussion in 'UPS Union Issues' started by beentheredonethat, Nov 18, 2012.

  1. beentheredonethat

    beentheredonethat Well-Known Member

    Hello all. I've seen lots of posts regarding the upcoming contract and the one phrase I see often is UPS makes tons of profit. I have two questions for you.

    1. If you were to have your own company what % profit would you expect\hope for on each dollars worth of sales? ie you sell an item for $1.00 how much profit should you make on that dollar of sale?

    2. What do you think UPS does with the profits it makes? (Please serious answers).
  2. stoni24

    stoni24 New Member

  3. anonymous6

    anonymous6 Guest

    i already posted my answer last year.

    clone research. ( think about it )
  4. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    10% profit.
  5. packageguy

    packageguy Well-Known Member

    Dividend, and they buy things.... And they put money in treasure
  6. union4life

    union4life Member

    Profits go to many places. UPS invests a tremendous amount in technology. The goal is to break the jobs down to the point where there is no skill required in our "skilled" positions. With PAS, EDD, and Orion, the area knowledgeof the driver and the loop detail the loaders have is slowly disappearing and the threat of strike loses its effectiveness. We are being phased out.
  7. Anonymous 10

    Anonymous 10 Guest

    Their profit is logistics
  8. brownmonster

    brownmonster Man of Great Wisdom

    In theory.
  9. rod

    rod retired and happy

  10. rudy5150

    rudy5150 New Member

    The problem for managment is that they do not know how to use the technology. Day to day the PAS fails and one manager blames the other manager and so on. Some dont even know how to change numbers on the Pals. The money should go into the real workers pockets. I say $2 an hour raise every yr for union part timers............$1 raise every yr for union full timers.
  11. PiedmontSteward

    PiedmontSteward RTW-4-Less

    Scott Davis dumps it all into a massive pit and then rolls around in it - naked. Bonuses are then handed out to upper management via the amount they can wrench away from every nook 'n' cranny with their teeth.
  12. brown_trousers

    brown_trousers Active Member

    There is no set percentage that is deemed appropriate. there are some that give everything back to employees and some who take all the profit for themselves.

    Maybe we should refer back to the "founding constitition" of this company. What values did Jim Casey found this company on, as they pertain to profit, reinvestment, and how much of this profit it's employees should own?
  13. beentheredonethat

    beentheredonethat Well-Known Member

    Well, I got some serious answers and others not so serious. Upstate was correct that UPS makes roughly 10 cents on the dollar. However my question was, how much would you want to make on each dollar of sale in your own company? If you look at other companies such as Apple, Microsoft and other Fortune 500 companies, the profit margin is much larger.

    Also, the companies that "give it all back to employees" are not public for profit companies. As a person who goes out and starts a company, you do it probably since you ahve a passion for it. Most people start companies to make money first and foremost. As a few others wrote, once UPS records "profit", we pay the federal govt a hefty Corp tax (about 1/3). We also use the profits left over for dividends to shareowners, we also use it to buy back stock. However, a lot of money goes into buying new package cars, the expansion to Worldport, New computers, New Intl Hubs. We also use it to buy companies such as TNT (hopefully that goes thru). If UPS didn't make a profit, there would be no more package cars, no more trailers, no more planes or air hubs. We need the company to make a profit to be able to buy those items. My point is that it seems so many people look at it and says UPS made a lot of profit, that's not fair, we should make more. I believe you should earn based on what the market pays for that job. FDX pays far less, but they also get a work force that is not as good as ours, and also a work force that does not do as much. However, there overall costs are much lower compared to ours. They have grown faster then us each year for decades now (their overall growth). If this keeps us, their volume will = UPS volume and then we will really be at a disadvantage.

    I still look at how the UAW allowed their members to make an extremely good pay rate. However, it was uncompetitive and eventually competitors beat them and the number of UAW employees is far reduced compared to the 70's. The more volume FDX gets, the more Teamster work that is lost to them.
  14. brown_trousers

    brown_trousers Active Member

    Companies don't need huge profit margins to be successful. Take a look at some of the most successful corporate giants and you will find that high profit margins are not a necessity to a hugely successful business. Take a business like WalMart, unbelievable growth, unbelievable profits, yet I bet they have less than a 5% profit margin.

    And is there any actually mathematics to back that up, how did you calculate 10%? I wonder if UPS actually publishes profit figures separately of each of its business segments, I would bet that just the small package segment alone of UPS would show larger profit margins than the corporation of UPS as a whole.

    And then...... you have to wonder how honest UPS really is about the details of their financials. We all know that UPS is an expert in manipulating "numbers" to their advantage!
  15. Dave Reed

    Dave Reed New Member

    As investor in a lot of companies and at one time UPS here are some figures I look for. Ups over the last five years has had 10 dollars of profits for every 100 dollars of revenue, that is pretaxed. The last two years that has increase in eleven percent. From that profit they pay out 54% in dividends for their shareholders who over the last two years have earned a little over 3% on their money. The remainder of the profit is used to increase cash margins, pay taxes, and to grow the business and buy things like airplanes, trucks and building. I hope to buy the company someday again when it gets in the low sixties. Right now it is a little to rich for me. The other concern long term for investors is the large amount of debt the company carries. At low interest rates it does not have a lot impact on earnings but once inflation kicks in it will change the landscape.
  16. beentheredonethat

    beentheredonethat Well-Known Member

    Go to UPS Income Statement | United Parcel Service, Inc. Com Stock - Yahoo! Finance

    Take UPS profit (Operating income) / Total Revenue = ~ 11% for last year.

    For Walmart they are at roughly 6%, with roughly 26.5 Billion in profit.

    WMT Income Statement | Wal-Mart Stores, Inc. Common St Stock - Yahoo! Finance

    Also, usually there are differences in companies that sell items vs services. Since they can sell the same item (toasters for example) over and over from the same shelf space (No.. not the same toaster, just another toaster).

    Also, the profit numbers are before taxes and UPS paid just shy of 2 Billion on taxes on slightly more then 6 Billion in gross profit.

    I don't think there is any convincing someone who believes a company like UPS would lie on our results to the SEC.
  17. beentheredonethat

    beentheredonethat Well-Known Member

    You are close, but you mixed gross profit and net profit. Our margin is 11% gross. We earned approx 6 Billion gross profit and just under 4 Bilion Net profit. Of the net profit we paid under 2 Billion in Dividends showing the 50% you mentioned. But compared to gross profits it was 1/3. All your numbers are right, but with mixing and matching gross and net numbers it tends to confuse the normal reader. We also spent about 2 billion in capital expenditures.
  18. brown_trousers

    brown_trousers Active Member

    Im sure UPS has a whole team of financial people to worry about this stuff, so people like you and me dont have to.
  19. rudy5150

    rudy5150 New Member

    The profits dont reach the part-timers thats for sure! Load quality and part time performance is dropping every yr because low pay scale for part timers (wally mart, mcdonalds like), impossible # goals set by upper management, and harassment day to day. Safety is another big concern for part timers but seems to never be addressed altho management says they care haha. Part timers make this company billions yet they continue to be the doormat for managment.
  20. Funfact

    Funfact Well-Known Member

    When UPS buy other companies they pay with cash not stock.