Discussion in 'UPS Discussions' started by fedxsux, Apr 11, 2006.
Does anyone know what the cost of the stock was on the 1st day of the 2nd quarter?
According to Yahoo Finance it opened on 4/3 at $79.80 and closed that day at $80.65.
Start of day 04/03/06-79.38
End of day 04/03/06-79.58
Thanks guys!! I enrolled in the stock program.
NEW YORK (MarketWatch) -- Lehman Brothers jumped on the bandwagon of transport stocks Tuesday, initiating coverage of airfreight carriers and railroads broadly and favoring UPS Inc. and CSX Corp. in particular.
Market growth, rather than market share, will drive parcel-shipping stocks this year, the firm's analysts said. "We believe that the industrial economy is strong and that market growth will again surprise positively during 2006."
The Dow Jones Transportation Index ($TRAN : Dow Jones Transportation Average
News , chart, profile, more
$TRAN4,648.92, -18.21, -0.4%) , which includes railroads and parcel carriers, has grown 29% in the last year.
Lehman analyst Gary Chase prefers overweight-rated UPS (UPS : united parcel service inc <IMG class=pixelTracking height=1 width=1 border=0>UPS81.25, -0.32, -0.4%) over rival FedEx Corp. (FDX : , but the difference is mainly valuation. UPS's current valuation is the lowest since the company's initial public offering, Chase wrote, saying that he expects a recapitalization transaction at the shipper in the near future.
FedEx's current share price already reflects anticipated progress at the company over the next several years, according to Lehman. It is rated equal weight.
UPS to Release 1st Quarter Results on Thursday, April 20, 2006
Wednesday April 12, 1:00 pm ET
ATLANTA--(BUSINESS WIRE)--April 12, 2006--UPS (NYSE:UPS - News) will announce its first quarter results on Thursday, April 20, 2006, at approximately 8 a.m. Eastern Daylight Savings Time.
At 10 a.m. EDT, UPS Chief Financial Officer Scott Davis will conduct an investor conference call. This call will be open to reporters and the public, on a listen-only basis, via a live Webcast.
To listen to the live Webcast: Go to www.shareholder.com/UPS and click on "Earnings Webcast."
The Webcast audio then will remain accessible on the Investor Relations Website for a limited time.
It will be interesting to see what the results are on Thursday. My biggest concern going forward especially into the summer months is fuel prices. Each of us has seen the latest rapid upward price per gallon and many estimates are saying well over $3 per gallon nationwide average price and that's without any storm realted disruptions like we had last summer. I think this and to my knowledge, the yet unsettled UPS pilot's contract will continue to be a drag on our stock allowing FedEx to continue to out perform us on Wall Street. I also think lagging in the back of investors mind's is the pending 2008' contract with the IBT. FedEx is building a larger capacity automated ground network as we speak with much of it to be completed by mid to late next year just in time to exploit the fears of shippers as UPS and the IBT continue to sit on their hands and wait until the last minute to work on a contract. This next contract will have so many big issues to address and here we sit doing nothing while FedEx sharpens it's carving knives and licking it's chops waiting to feast.
Fed Ex on the ground side in it's larger facility network is/will have a newer and much more efficent internal package processing system whereas UPS is dealing with a vastly older facilites network footprint and in some of these cases the surrounding environs no longer yeilds the density of packages as it once did as this community has moved further away and FedEx has capitilized on this somewhat by now placing itself where the density is. Not only do they position themselves for a potentially lower total fuel cost as a result, they are also getting in position to tell some customers that they can offer a 8:30 pm or later pickup because they are down the street in a new, efficent, high speed processing facility whereas UPS is 20 miles away through redlights and traffic and thus it's latest pickup time is 7:30 pm if not earlier and the building it returns to is 70's, 60's if not older technology that is not high speed and requires more human power than machine power thus again driving up costs. Whether UPS decides to meet FDX head on in the automated pacakge processing side is open to debate but the one thing that is a truism is the old physical buildings and systems of UPS's network verses FDX's and the old saying of location, location, location. Over the coming years UPS will begin to have to address this issue on the domestic ground side and thus is will either have to curtail it's air and global expansion, take a hit on it's net EPS to both maintain the air/global expansion while upgrading the domestic ground network or sitback and maintain the status quo and take the hit from FDX that we'll likely see as a result and hope the hit isn't to hard.
Wall Street is seeing this larger upside potential for FedEx too and one of the reasons their stock is doing so much better than ours. However, the last coupe of weeks has seen FedEx stumble a little while we continue a slow steady upward pace. I don't see us displacing FedEx in the area of stock price with FedEx having a ttm EPS of $5 plus while UPS for the ttm EPS is $3 plus and the PE is FDX 21 and UPS 23 so IMO unless UPS throws down a really awesome number I don't see UPS closing the gap to much unless FDX stumbles. If we do have good numbers on Thursday and the economy and shipping continue the pace it's at along with the markets I do believe over the next weeks to month or so we will see UPS surpass it's alltime high of $87 per share back in Dec. 04' but that also hinges on the fact we don't shoot ourselves in the foot either. Based on the current and future EPS along with both trailing and forward PE I just see FDX continuing to out do us stock price wise unless they stumble or we blow away the numbers and I don't see that either.
I also can't believe there isn't 10k posts about stock splits either!
I believe the primary reason FDX has outperformed UPS in the recent past is due to the prior spread in PE between the two stocks. Ultimately, the market determined that the PE's should be closer together. Now, the premium is much smaller, although it is still evident which indicates that the market still likes UPS slightly more regardless of share price.
As for fuel, if it hurts UPS' price, FDX should suffer the same fate. FDX is contending with labor strife in their pilot ranks as well. I do agree that the view of the upside for FDX is brighter but by the same token, there is more downside risk in FDX vs. UPS. The betas of the two stock support this theory.
Short term, my thoughts are the downside risk is stronger for UPS due to the recent run up. I've been amazed how resilient the rally has been in the face of high oil and down market days. As long as earnings and forecasts remain in line, I think the announcement could mean a non-event in terms of substantial price changes. I'd bet slightly to the downside however, due to the recent market gloom. As we've seen, anything construed as negative seems to bring the price down, right or wrong. With high gas, rising rates, and inflation garnering more and more headlines, the mood is gloomy. But hey, everyone's got an opinion so who knows?
Yeah I agree about the PE. If you'll remember or look back, about 5 years ago UPS had a PE in the mid 30's with FDX in the teens and their reasoning at the time for UPS was that with Cap Corp. UPS was more like a GE stock than a pure transport and thus a PE in the same neighborhood as GE. Of course that all changed in the following years as a more realistic view emerged.
As to the shortside risk it's an open book to me. We're still $5 bucks away from our alltime high of $87 plus but if you compare us now to then there is a difference IMO. Obviously the revs and earning are higher and our global footprint has grown as well. We now have Freight to our product mix plus our customs abilities have vastly improved and we continue to accelerate our domestic time-n-transit lanes to where we are not only matching what FDX has done for years in that area but in some locales we are exceding them. The negative to the lane enhancement is what will be the total cost factor at the end of the day verses placing the product on the rails as we've done in the past? I do think this move by UPS will have a secondary benefit regarding labor relations as this will add many new FT jobs to the workforce and make a lot of people especially happy at IBT headquarters.
It would also appear our domestic volume growth having lagging under 3% for the last many years may in fact have not only exceded that but is passing the 4% mark. Don't quote me on that as I'm working from memory here and I could be wrong on that part. UPS many clear that picture up tomorrow with the lastest earning report. The one area that I think UPS can clearly help itself to propel way beyond FDX is to move more and more towards automation. I know this word normally means sac-relig among union folk and in some cases some jobs might be lessened but those jobs first off tend to be inside jobs of the PT ranks. I also contend that is you take a look at vastly automated facilities like Worldport for example, you still have 1000's and 1000's of people employed because all that automation still takes people to run it. The big difference is the jobs change and tend to be of higher pay because in many cases the people needed are of a more technical/skill type.
Also, since you are in the IS function, or at least I take that by you alias, more and more technology is needed even inthe older conventional buildings. For example, the current hand scanners used by the loaders are great but when do we step up and have scanners programmed to kick out misloads? Right now we rely on the person to do this and the success to failure IMO corresponds to the amount of effort done by management to hold people accountable. From what I've seen over the years in my location it's been a very mixed bag at best so again IMO the system has failed because the hourly for whatever legit or illegit reason isn't always getting it done and management for whatever legit or illegit reason isn't getting it done either. Go into SEAS and look across the country over time and then look at what is or is not done locally and it paints this very picture IMO. Now even with a smart scanner, you could still have some knucklehead misload the package but it still take a lot of human error potential out of it all.
I also think another reason we don't follow FDX (yes their scanners do this) is the heat is now on UPS' IE department to maintain the flow systems in order to make sure the scanners are right. It's funny when IE makes flow updates, in many cases you'll see an increase in SEAS of misloads and mistoggles and it's not uncommon when you begin to research the problem you'll find it stems back to incorrect data entered by IE in the new scheme. Could it really be high up the foodchain someone is scared knowing the responsibility that comes with this? Like automation, I always hear the same ole' "COST! COST! COST!" regarding automation and yes in some cases that's true but IMO it's not true in all cases and we still have a company that for the most part fears moving further and further into automation. This is where FDX, especially on their ground side, gets the big gold star because as they build their ground network they are looking ahead at an ever shrinking low wage labor pool and placing in solutions now to lessen that impact in the near and longterm future. IMO UPS is not as we still have to many dinosaurs in high places with the "give me a roller section and 20 people and I can git er done!" attitude.
Roller sections are a plenty but the people are a different story. Now add in this part that I rarely see discussed. Go and find out what your average inside employee must committ to memory to do their job. Sure they have the obvious methods of processing the package but then you have all the Safety related items like HABITS, current DART info, who is you safety person in you area, what are the functions of the safety committee, etc. and then you turn around and audit your operations which in most cases is a rush job to be able to pass at the last minute by management and then when you don't pass, much effort and expense is made to now prepare for the re-audit coming again soon. Couple all this in many areas where your workforce is almost a revolving door process and this time and effort of continous new training and lower productivity from any new employee until they begin to understand the ropes is a huge cost burden.
That is what FDX is building itself towards working around but I just don't see the same "sense of urgency" from UPS to follow suit. Again, I know I'll get cries of foul and treason from many here but my thoughts are not anti-union at all. Anti Pter maybe and moving the larger UPS workforce especially on the union side back towards large majority Fters but not anti-union. I'll plead guilty to that charge with no problem. Also less labor cost for UPS from Pters means a potential for more money to us Fter pockets because the pot will get bigger! Yep, it's about me!
Lastly, I do think FDX is on it's topside pricewise to it's stock. Looking at the last year with both stocks side by side FDX is up around 35% while UPS is up nearly 20% but in the last month UPS' stockprice trend line has been a nice steady uphill climb whereas FDX is looking like a fun roller coaster. This also tells me the market may have swung towards UPS and the thinking is tomorrow's numbers could be really good. I'll guess we'll find out in less than 24 hours.
I'm still shocked we see no "STOCK SPLITS ARE COMING" threads.
Why not buy some Berkshire Hathaway and learn from the "Oracle of Omaha" of why not to worry with stock splits. In truth, there's no need for them IMO.
Sell now if you can. It\'s gonna be a bloodbath.
UPS 1Q Earnings out at 89 cents a share. Street estimates were for 88 cents a share. Current bid price for UPS stands at $83.22 but of course other events of the day will impact this Limey's comments not withstanding!
UPS 2Q estimates are 97 cents to $1.02 a share. Been awhile since I looked but traditionally UPS has been a little lighter on earning during the 2Q if I remember correctly. If I'm correct and we come in on the high side of those estimates IMO this would indicate good things ahead.
Prior to the report on UPS they covered Union Pacific railroad which has gone from the $60's shareprice to the upper $90's. As Joe Kernan said, seems all the talk several years ago that physical would be replaced by virtual was way premature and we (UPS) are in position to be the physical connection that the virtual world needs to survive.
UPS BOARD SETS DIVIDEND
The Board of Directors of UPS today declared a regular quarterly dividend of 38-cents per share on all outstanding Class A and Class B shares. The dividend is payable May 31, 2006, to shareholders of record on May 15, 2006.
Dow Transports Soar To Record
Robert Malone, 05.04.06, 2:00 PM ET
New York -
A leading gauge of the United States transport business--the Dow Jones Transportation Average--surged to an all-time high on Thursday, indicating a very healthy transportation sector and, more broadly, a healthy economy.
Without a healthy economy, manufacturers don't ship, and consumers don't order, so in recent years the Dow Transports have become a key bellwether of economic climate, far beyond the narrow sector it tracks.
The oldest index in use (since 1884 and then principally railroad companies), the DJTA tracks 20 leading companies that constitute the cream of the industry in rail, air and ground transportation. Their principal modes are highly connected to transportation in the sea lanes as well.
There are several good reasons for this surge in the Dow Transports. China trade continues to dominate, and that means transportation of containers to the U.S. Of the 17,000 shipping containers that come into the country each day, the majority are Chinese exports. They are shipped, trucked and passed through intermediary facilities all over the country.
This business also includes major expenses and profits for distribution centers set up in China by U.S. third-party companies like <ORG>UPS<ORGID idsrc="nyse" value="UPS"></ORGID></ORG> and <ORG>FedEx<ORGID idsrc="nyse" value="FDX"></ORGID></ORG>, among others. The health of these U.S.-based companies is being supported by increased global trade.
A second major cause of this stock surge comes from the 3.2% increase in U.S. productivity, which translates into greater transportation demand to move goods as materials, parts and finished products.
The entire supply chain benefits from increased productivity, since at each stage of a product's transportation life cycle, there are complex transits involved, and warehouses, terminals and distribution centers are kept busy sorting and redistributing.
When this productivity is coupled with the good figures out today on solid U.S. April retailing business, a clear demand is in place. Retailing is where the demand for goods is initiated, and strong sales call for more orders of more goods. In a domino effect, strong product orders can, in time, lead to even more shipping business through returns, refurbishing and replacement.
A third factor for the increase in the transport index is the track record of the companies that make up the average. For instance, <ORG>Burlington Northern Santa Fe<ORGID idsrc="nyse" value="BNI"></ORGID></ORG> has seen a first-quarter increase of 31% in earnings over a year ago. And UPS has just stated that it's racked up an 11% increase in first-quarter profits versus last year's figure.
The supply chain is now a multi-faceted system that can only be understood in a global context. It is this global context that is fueling the shares' increase.
Missed the analyst's estimates by 3 cents.......we're screwed !!
UPS down to $73 area in premarket and FedEx taking a hit as well down from $110 to $106. Ground volume up 4.6%, International volume up 16.5%, export volume rose 6.5%, nondomestic volume up 23.6% Total Revenue topped estimates by $130 mil, Total Rev. per piece up 2.7%, earnings were $.97 verses $.88 same Q a year ago.
UPS Comes Up Short
I can remember a couple of years ago where numbers like this would have sent us soaring and we'd have giving anything for them. I wonder what numbers like this would have done if our stock was still private? I've just not been convinced nearly 10 years later that going public was a good thing or even needed at all. Personally I really question the motives and maybe even the integrity of Mr. Kelly and the higher ups at the time who made and drove this decision.
Conference call today will be interesting. UPS needs to learn from FedEx in how to sell themselves and still leave room in the box so that when you post it always can be sold as above what was expected. FedEx very good at this and my guess is they'll take a hit today but will be in position to sell itself for the longhaul and be back up in short order.
Wkmac....I had the same question about going public in my mind this morning too. I agree, "wording" is everything when reporting. It was still positive growth and out of about 10 articles, I only found one that read positively about the earnings. It's a game that UPS is still a newbie at....pleasing Wall Street.
Of course I'm hoping this is just a bump in the road and we will be above $80 again soon.......gotta keep Susie away!
Alright, Be nice!
ouch! that hurt. glad I sold most of my UPS stock a few years ago when big Mike had to come out after a poor 4th Qtr. Mike said the numbers were not met do to bad weather, only to say it was due to lost market share a few days later. Some people took a huge hit today
On behalf of the poor front line management saps i would like to thank scott and mike and everyone else in atlanta for the fine job they did the past year. How does one begin to thank so many for the capital gains i wont have to pay now that my stock has been slaughtered. But now i forced to decide between continuing to hold my money in UPS stock or switch it to a checking account at the local bank. Lets see, not even a 2% return from the closing price the first day almost 7 years ago. Oh the choices I must make, but at least i lost the burden of those darn capital gains. Anyone it Atlanta care to offer us some guidance?
There are some positives, 1. we now have a lower PE, 2. the dividend yield went up considerably, and 3. we still pay out more in dividends in a year then fedex makes. (smoke that montecarlo)
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