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United Parcel Service, Inc. Message Board

  • dudesbag dudesbag Jun 18, 2013 6:12 PM Flag

    a maybe mea culpa on FDX......

    We'll see when they report early tomorrow. The investing pros seem really divided on this outcome. First, a few negatives: 1) big miss Q3 (Qtr ending Feb for FDX); 2) Asia slowdown; 3) fuel cost tailwinds gone; 4) customers continuing downgrading to deferred services. All 4 of these should weight heavily on their Q4 report tomorrow. Positives: 1) first effects of $1.7B cost savings initiatives; 2) EPS/revenues expectations have been lowered. I truly can't think of any more that would have affected this quarter's numbers.

    Now, going forward advice may be their saving grace. While I still believe the analyst average EPS number of $7.36 for FY 2014 is high (21.6% over this year), hopefully I'll be proven wrong. But given that the increase over '12 was a tick under 8%, it would be a terrific achievement. This would particularly be true since the new USPS contract will not be as profitable for FDX. Besides that, the insane futures market for oil makes it very hard to predict future fuel costs. Who would have thought the price would be about $98/barrel given the much improved U.S. production levels?

    So, we'll see. The call option levels for today indicated that the smart money expects a decent report with solid going forward indications. I hope it works out that way so we could see a nice bump now and another one next month. If I was a betting man though- well, I would have folded by now....

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    • I definitely was wrong on their Q4 as they did real well EPS-wise. But revenues were pretty flat and their going forward advice tempered EPS growth from the analyst's expectations of 21.6% down to a range of 7-13%. All in all, great news for UPS though...

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