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UPS PROJECTED PROFIT INCREASE DUE TO NEW TAX PLAN
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<blockquote data-quote="Mugarolla" data-source="post: 3312346" data-attributes="member: 8481"><p>Correct. But we do not know if they have the same, or similar, deferred tax liabilities as FedEx. This is where FedEx expects to save the other $1B. And this is, for the most part, only going to happen for one year.</p><p></p><p></p><p></p><p>Correct. But what are they?</p><p></p><p>UPS has not said, and we do not know. We do not know if they are higher, lower, or if they even exist at all.</p><p></p><p></p><p></p><p>Yes. Most of it coming from their deferred tax liabilities.</p><p></p><p></p><p></p><p>You cannot assume that without knowing what their deferred tax liabilities are. Just because Fedex's are huge, doesn't necessarily equate to UPS's being just as big, or bigger.</p><p></p><p></p><p></p><p>Again, you are assuming. You have no facts except what FedEx said. You are assuming that since UPS is about double the size of FedEx that their savings will be double.</p><p></p><p></p><p></p><p>Nope. He calculated the new corporate tax rate using UPS revenue, not profit.</p><p></p><p>FedEx said their profit will greatly increase based on two facts.</p><p></p><p><em>But the shipping giant told investors in its earnings release that its annual profits for fiscal 2018 could increase by $4.40 to $5.50 a share, <strong>mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.</strong></em></p><p></p><p></p><p></p><p>OK. So what are UPS's capital expenditures, or what did UPS say they will save, like FedEx did?</p><p></p><p>FedEx never attributed their higher profit due to deducting their capital expenditures. So it is probably minimal.</p><p></p><p></p><p></p><p>What favors transportation companies like FedEx and UPS is huge deferred tax liabilities.</p><p></p><p></p><p></p><p>These buildings were being built long before UPS even knew that the change in the tax law would come to fruition.</p><p></p><p>They needed these just to keep up. Buildings are over capacity everywhere.</p><p></p><p>And I think the timing was more because of the upcoming contract, crying no money left, more so than believing the tax law would change.</p></blockquote><p></p>
[QUOTE="Mugarolla, post: 3312346, member: 8481"] Correct. But we do not know if they have the same, or similar, deferred tax liabilities as FedEx. This is where FedEx expects to save the other $1B. And this is, for the most part, only going to happen for one year. Correct. But what are they? UPS has not said, and we do not know. We do not know if they are higher, lower, or if they even exist at all. Yes. Most of it coming from their deferred tax liabilities. You cannot assume that without knowing what their deferred tax liabilities are. Just because Fedex's are huge, doesn't necessarily equate to UPS's being just as big, or bigger. Again, you are assuming. You have no facts except what FedEx said. You are assuming that since UPS is about double the size of FedEx that their savings will be double. Nope. He calculated the new corporate tax rate using UPS revenue, not profit. FedEx said their profit will greatly increase based on two facts. [I]But the shipping giant told investors in its earnings release that its annual profits for fiscal 2018 could increase by $4.40 to $5.50 a share, [B]mainly due to a change in how it values deferred tax liabilities as well as the cut in the corporate tax rate to 21%.[/B][/I] OK. So what are UPS's capital expenditures, or what did UPS say they will save, like FedEx did? FedEx never attributed their higher profit due to deducting their capital expenditures. So it is probably minimal. What favors transportation companies like FedEx and UPS is huge deferred tax liabilities. These buildings were being built long before UPS even knew that the change in the tax law would come to fruition. They needed these just to keep up. Buildings are over capacity everywhere. And I think the timing was more because of the upcoming contract, crying no money left, more so than believing the tax law would change. [/QUOTE]
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