Stock Price

Our hub in Louisville took a terrible hit by the weather. FedEx main hub is in Memphis, they did not get the winter storm like Louisville did. Nothing went in or out of Louisville for a couple of days due to that storm. It was a huge problem for UPS.

Bad weather? Perhaps a contributing factor but not the smoking gun. And this ANALyst passing the buck blaming the "friendly Teamsters" for restricting cost-cutting measures officially gets my vote for Jack#%* Of The Year. What a load of tripe. I was wondering how long it would take before somebody on Wall Street would pull out the union card. I'm surprised it took this long.

"There's something deeper going on here."

What do you think it might be?

Yeah, amazing!

Decades of increasing volume and profits and a slightly disappointing quarter and it's the union contract fault.

What a load of . . .

The Louisville problem was an act of God and UPS did not have to honor guarantees.

So the Louisville episode was a headache, and I am sure a disappointment for customers involved, but not a major expense point for UPS.

That we have lost short term volume to FedEx, possibly, and to DHL, certainly, but who knows about the future.

Still, this little trip back to stock reality might be good for those who are putting too much of their investment money into the company they get their paycheck from as well.

Basic investment strategy forewarns putting all your eggs in one basket.

I know there will be many here who will pooh pooh such cautions.

Just like the people of Worldcom, Enron, Global Crossing and many others who ignored such common sense because nothing could truly damage their company.

Sound familiar.

I know, but really, NOT UPS.

I certainly do not think so either and hope not as well, but I will not wager my financial future on it.

I already have the pension fund and social security to disappoint me.

Let's not panic yet! UPS has been good to all of us shareholders. The stock has been down and the stock has been up. Unless you are planning on selling your stock today the share price is not important. UPS still pays some of the highest dividends on the market and I have not seen or heard anything to change that. I, for one, will be more interested in the final numbers, not the projections.

I think its about time corporate starts looking at all the excess lame duck management around. My guess there is easily 20% of mid-upper level managers just waiting for retirement at 55 yrs who are absolutely worthless and collecting an exhorbinate salary. Time to cut costs where it will make a difference. Corporate has to start answering to the shareowners. FDX is sinking this tight ship and the captain is asleep at the helm.

Psstdrvr

My goodness. I've heard calls to take action, but never that drastic of action. I have no proof that those kind in management don't exist, but the select few I see and deal with daily appear to be working extremely hard. Like Water302 posted, one quarter's numbers won't torpedo the whole ship under. Don't start selling. Unless of course your looking to score some quick cash to buy a vowel or two for that very descriptive name. Yeah I know...that's a cheap shot...I couldn't resist though...

Now the really high up hotshots? That's where some answers need to come from as to the speculation about what caused the shortfall in earnings. And after chatting with drivers I know from the other buildings that have undergone the rollover to PAS/EDD I've got a good idea why. The new system that was billed as the miraculous cost-cutting yet more efficient service enhancing cure-all has failed to live up to all it's hype and hasn't delivered the savings that Corporate insisted it would create, and now the front-line management is getting squeezed for answers why. It wouldn't surprise me one bit if the suits in Atlanta started believing thier own propaganda and built these percieved bundles of money saved from EDD into the earnings projections that they passed along to the Wall Street crowd.

It wouldn't be the first time a boardroom of MBA's had become so diluted in thier own hubris that it distorted them from the reality of what was actually happening outside the ivory towers. Probably not the last time either. I'm sure it will be the "exhorbitant labor cost burden" that is just the allmighty evil to the poor and downtrodden shareholders.

"It wouldn't be the first time a boardroom of MBA's had become so diluted in thier own hubris that it distorted them from the reality of what was actually happening outside the ivory towers."

LOL, me thinks your english teacher would so proud of your deliverance of such qualitative prose..

The "Teamster friendly" remark is true, whether we like it or not. UPS has the hardest working, highest paid drivers in the industry. I'm not saying drivers don't earn their pay, but it does impact the bottom line.

You can't blame it on excess management either. Take a look at the on-road supervisors. How many of them who have been promoted in the last several years have come from the driver ranks? Not many. Drivers that work overtime actually make more than their supervisors in base pay. What kind of sense does that make?

I think every employee at UPS will be impacted by the poor 4th quarter 2004 financial results. We'll just see what happens. Look at the airlines - asking union employees for concessions at every opportunity and cutting management jobs. UPS may not react this aggressively, but there will be a reaction.

<font color="ff0000">diluted in thier own hubris </font>
<font color="000000">?
I get what you are trying to say, but</font> you do realize that statement makes absolutely no sense.

I don't think it is time to panic--After all, the stock price is still about $5.00 per share higher than at this time last year...

However, the price of UPS stock today, reflects a continuation of the steady--if unremarkable, returns since 1999. Please correct me if I am wrong, but it appears as though the total return for the last 5 years is about 20%.

Given the fact that many people lost huge amounts of money during this same period, our UPS stock has done quite respectable. BUT--could it be that some of us (myself included) have fallen in love so much with the UPS stock (ever since that day in November of 1999 when we opened our statements and discovered the value doubled) that we have allowed ourselves to have "too many eggs in one basket"?

Personally, I am upset, because I had planned to correct the situation by selling off a substantial amount of UPS shares this month. However, I got greedy and waited too long.

As ok2bclever stated, we already have the pension fund and social security to disappoint us...

One cannot compare the airlines to ups. The airlines have always had problems. UPS management style and cost cutting measures are much better than the airline industry. We at ups seem to be more careful with our money. Their (the airline industry) problem stems from not controlling costs, having no direction etc. Many of the low cost carriers are doing quite well.Compairing the airline industry to ups is comparing apples to oranges.
Unlike many on this board who always think doomsday for ups, I feel ups has a good future...And I'm an hourly employee.

Very nicely said and dead-on proups. You get a big from me. The way the street reacted you would think we're about to report a loss rather than several cents shy of an earning position. This over reaction also reflects the problem that investing in America is no longer done using sound principles but rather a lottery ticket mentality. I wonder sometimes if we don't have a few of those very same folks among us and the worse part that scares me is those folks are the one's who make many decisions that effect all of us and present what we are to "The Street". JMO.

BTW: UPS has a current PE of 26 and FDX is around 21. Folks we just got ahead of ourselves. No doubt it was nice but truth hurts!

(Message edited by wkmac on January 14, 2005)

My husband and I have a conspriracy theory.

UPS is buying back shares. We feel like they are driving the cost of the shares down so they can buy back at a lower price. After they have the shares back, then their overall outlook is going to go back up and so will the price of the stock.

"My husband and I have a conspriracy theory."

I don't think there is one. My friend in Dallas told me he has seen no one from UPS hanging around the grassy knoll and he checks it daily.

If we can believe that UPS would engage in a conspiracy to drive our price down, we should sell all our stock today and invest in Krispy Kreme or some other such company.

Have a great day.

rd:

UPS recently stated they are prepared to do a $4billion buy back of stock. If they did that at once, it would instantly drive the price of the stock up. When companies do large buy backs, they do it in smaller amounts over the course of a few months or even a year. When all else is constant, a reduction in shares outstanding (like from a stock buy back) should raise the stock price to match the current market cap (market value of the firm)

I thnk UPS is in its infancy when it comes to putting a spin on their projections. They come right out and tell the boldest truth......other companies flower their language,so the stock doesn't take a beating.

Since UPS went public around '99, that would
make it a kindergartner compared to the likes of the other,more senior publicly traded companies.

I'm not saying to lie about anything, but there's both a neg. and a pos. way to make the identical statement.

Am I the only one who had to look up "hubris" ??

Hubris: exaggerated pride or self confidence.

Regarding the comparison of UPS and the Airlines, I do believe that UPS does a good job of controlling cost-----however, if you continue to increase pay and benefits over a period of time----and allo of your competition does not have to-----and the competition is able to offer much, much lower rates to buy business----and UPS can't charge rates lower than our cost otherwise we are faced with Preditory Pricing and are subject to civil action---how long would it take for UPS to lose major market share----------so here is the question:

Why is Southwest, a non- union carrier, doing so well , while all of the other Union carriers have either gone out of business or are ready to file Chapter 11??

I definitely see some comparisons-----let's do everything we can do to keep our current customers and not give them a reason to go to our competitors!!

It is normal for a stock price to drop when the company doesn't match or exceed expectations for the quarter.

Especially when they have been on a roll.

The weird reasoning given didn't help.

If a company loses stock investor's trust it loses it's stock price.

Especially after the Enron, Global Crossing, Worldcom, etc integrity failures.

UPS does NOT want to do anything to cause the investors to doubt UPS's word.

While Southwest did make a profit, it was barely.

All the rest, union and non-union lost varying degrees of money.

So obviously union labor is not the inherent troubling factor to that industry.

Sorry all you union haters.

The industry is in trouble because there is far more supply than demand and the over-competition versus actual operating costs are setting prices.

In the small package industry, DHL is causing an increase to the "supply" versus the "demand" and their artificial low rates at an operational loss to force their way into increased market share is causing UPS to raise rates less.

Both of these will negatively effect UPS in the short term, but DHL still has to prove it can provide a good and consistent service or financial reality will balance the equation by eliminating them.

The sky isn't falling.

It's just raining.

Brace up buckos.

Deliverman, my girl walked in and needed my help right then and there so I had to fire off that last rant of mine quickly. I'm glad you understand it's intended meaning.

Moreluck, I think the only reason I remember the word is because I had to reach for the dictionary the first few times I had seen it in print. By no means am I the only driver that refers to the term when asked by management why someone that would bother to get a college degree would continue to deliver packages rather than put on the tie.

Tieguy, I think if any of my teachers were to look at any of these boards they would be stunned by the numerous spelling errors of many posters and myself included. They likely would figure that if all UPS people were as bad at math as they are at grammar, that it shouldn't be a surprise that the company couldn't come up with the number that Wall Street was looking for.

Proups, no doubt the driver is paid higher than that of the competitors. That's why many like myself get irritated when they see the same mistakes made over and over due to the refusal of management to acknowledge where the mistakes originate from in operations as opposed to where and when the mistakes encountered. I and every guy I work with wearing the browns am all for streamlining the process and I don't even want a cut of the cash saved from doing so.

I don't expect the people in Atlanta to get a slam dunk every trip down the floor. Even the best can make mistakes. But when they start making the same mistakes over and over, something on thier end needs to be changed before any cost-saving measures can ever stand any realistic chance of success. And that's not just the driver's take. I know many of the sups(whether current or former) feel the same way towards the big cats.

They also have spoken the word hubris when describing what it's like on the other side. Many regret going there. After listening to them describe the treatment from above, I can start to see why.

"Deliverman, my girl walked in and needed my help right then and there so I had to fire off that last rant of mine quickly."

Ahhh the story gets better.

Don't sell yourself short the wording was interesting.

Back to the topic.

I'm wondering if the 1.4 million packages sitting in Louky cost us more than we may realize. Our normal response would be no refund due to weather delay. However if some large shippers were upset their christmas packages did not arrive by Christmas then I wonder if we would have refunded to retain their good. will.

The other reason given was peak volume lighter then expected. We plan extra equipment rentals well in advance. Once we have it we are basically stuck. You can't look at the volume trends the first two weeks of december and make adjustments because we would be fighting past trends. The past two or three peaks we have seen a last minute rush that did not happen this time.
I am surprised to see volume given as a reason because we were clearly up in my part of the world.

Did anyone see any large shippers leave us that were prominent shippers last peak?

We had all supervisors working the whole peak and only had one day of bad weather which was in the last week of Christmas.

I have several drivers that thought enough was enough and filed supe working grievances, something rare at least here as there has always been an unwritten rule of "whatever it took" for Christmas.

But this year we were not allowed to hire even one driver and had days where they wouldn't put all the drivers on the road as drivers, but used ten or so as helpers to stay at the driver numbers the geniuses up above dictated again while all the supes worked as mentioned.

Think I'll quote that stock reason given of "peak volume lighter then expected" when labor tries to use the "exhausted all reasonable means" at the next grievance hearing?

<font color="0000ff">Ahh the story gets better</font>

Well I wouldn't go that far. A tv show she wanted to record was about to start and she wasn't sure if she had the VCR set up correctly.

That was the case here with the rentals. Lack of capacity did occur the previous year at peak and I'm sure they didn't want to see that situation again. This time I swear there was one that never moved for maybe an entire week. I think the bosses may have used the other to shuttle some stops here and there, but I don't think it ever hit the building line-up.