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United Parcel Service, Inc. Message Board

dudesbag 43 posts  |  Last Activity: 12 hours ago Member since: Oct 3, 2004
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  • Reply to

    Earnings--April 24

    by frozenfast Apr 15, 2014 3:54 PM
    dudesbag dudesbag 12 hours ago Flag

    Share price now near $98. Could partially be the result of a slight EPS beat by Union Pacific Railroad and they just missed revenue projections despite earlier warnings of harsh weather impact. They are seeing gradual economic improvement and today's discussion about what appears to be an improving hiring environment and less new unemployment claims than expected is probably helping. So, if we hold the upper $90's going into earnings and slightly beat and can speak favorably of the contract negotiations, thins should turn out well.

  • Reply to

    Earnings--April 24

    by frozenfast Apr 15, 2014 3:54 PM
    dudesbag dudesbag Apr 16, 2014 4:04 PM Flag

    More reasons to like our future share price. While air freight and logistics companies are DOWN 8% YTD, rail and road companies (3 major rail lines and Ryder) are up 3.5%. CSX authored a nice report a few days ago and most of the others report either later this week on before just UPS next week. It's time for our sector to rebound as well. The UPS expectations are conservative and could/should be slightly beaten. Our trailing 12 month P/E is just over 21 and, if we meet our next years estimates will only be 16.38 at today's share price It would seem logical to assume say an 18.5 P/E multiple and that would put us in within close range of our all-time high of $105.37. So, unless we have unexpectedly serious and prolonged labor trouble, the Russia annexation problem worsens, and perhaps some other unforeseen events materialize, we should be looking good. I would be more dubious about FDX. .

  • Reply to

    Earnings--April 24

    by frozenfast Apr 15, 2014 3:54 PM
    dudesbag dudesbag Apr 15, 2014 5:11 PM Flag

    I like our chances to just beat expectations. Expectations are for revenues to beat last year by 3.5% which is close to the price increase YOY. The EPS analyst expectation was $1.12 just 30 days ago and has come down to $1.10 probably due in large part to the poor FDX report that included January and February. A few hours ago, CSX reported their quarter and beat lowered expectations both in revenue and EPS. The stated they were still impacted by harsh winter conditions. So, while it would be hard to envision our beating what the analysts are looking for by more than a few pennies, we should beat none the less. A real coup would be to climb over the $14B revenue number as our solid margins allow much of that improvement to go to the profit bottom line. Since analysts project $13.91 that would be hard to achieve though. Perhaps the most important take away will be the going forward advice. No doubt, there will be several repeated questions about the WorldPort negotiations and those in Pittsburgh and Philadelphia. As I had posted earlier, it seems like the issues aren't anywhere close to insurmountable and 5 years labor agreement would take away from the poachers ability to do what they do.

  • Reply to

    Ramifications of FDX accident

    by dudesbag Apr 14, 2014 11:25 AM
    dudesbag dudesbag Apr 14, 2014 12:10 PM Flag

    Good to know. I wonder if public perception would trump that? As a long-retired UPS'er, I didn't know the facts you presented and you know how the politicians can be.

  • The tragedy took place in California and the final analysis of the cause will take months. The issue of twin trailers however will be front and center early on. As we all know, this method of transporting volume cuts down tremendously on sorting and handling thus being more efficient, cost effective and cutting down the potential for damage. If I'm not mistaken, some states even allow for triple trailers. So, one must wonder if we're looking at the possibility of future without twin or triple trailer operations.

  • According to a Dow Jones Business report, the latest supplement language was rejected by a count of 2,804 to 185. This sounds bad but there are several reasons to not get too worried. First, there are some 8,000 or so Teamster employees there so about 37% voted and usually the more negative ones tend to do so. Secondly, there seem to be 3 stumbling blocks in the negotiations. The biggest problem stated is the need to put in place more equipment to get the workers from the parking lots to their assigned work areas. This turns out to be a need for more shuttles and more metal detectors. I'd like to think that is an easy fix. Another issue is a pension increase for some workers that was part of a prior offer that was rejected and the payment offer rescinded. Let them negotiate that one. Lastly, there's a similar issue involving a $1K contract ratification bonus. So,I'd like to think those are not issues that would lead to a work stoppage. But, like I mentioned before, there is a wildcard circumstance here. Most of these employees are part-timers and not UPS career-minded people for the most part. Who knows how many depend upon medical coverage or would like to remain at UPS for a good period of time. It's the mavericks who are feeling their oats for maybe the first time with little to lose that don't look at the larger picture. If I'm the Teamster leadership and I know that all but 3 locals have approved the 5-year National Agreement, I'm not looking to risk everything for the sake of an unsatisfied few. Also, correct me if I'm wrong but I don't think the contract can go into effect until every local ratifies it. So the 5-year clock doesn't start ticking and the improved benefits don't start accruing until all sign. Anybody is welcome to correct me.

  • Reply to

    250 Maspeth drivers get their jobs back

    by dudesbag Apr 10, 2014 10:51 AM
    dudesbag dudesbag Apr 10, 2014 12:18 PM Flag

    Good point xitabil. That article about the testy negotiations seemed to indicate that the issues were not huge though. The scary thing though is that part-timers are not as career/family bound as the majority of Teamsters at other locations. Unfortunately, Worldport is obviously the the major cog in the UPS air operation and any disruption there would be catastrophic. I'd like to think that those who value the relationship between the Teamsters and UPS would come to their senses and get this resolved ASAP before lost volume and job losses occur. The same of course goes for the other locations that are holding ot on their supplemental agreements.

  • Probably the best resolution to the problem. Each will receive a 2 week suspension without pay (the timing of which maybe someone can explain). While we're at it, can someone explain why the Local 804 folks seem to think this is a win for them? If the average driver makes $60K/year, the unpaid suspension costs each about $2,300. Meanwhile, the union activist who was at the center of it, seems to to have his return to work still up in the air. Anybody have inside details?

  • A story in Sunday's Inquirer discusses the topic of the independent contractor business model and how it is basically a systematic way for employers to avoid many of the costs historically associated with the traditional employment model. There are 20 pending cases vs. FDX which is the most egregious of all the cases in that they drive FDX-leased vehicles, wear FDX issued uniforms, use FDX hand-held delivery record computers, are dispatched from FDX centers and basically are managed like any other FDX employee. When, not if, the courts come to this obvious decision of these drivers being employees, the accumulating expenses will be enormous and the going forward implications will finally even the playing field.

  • This is not an off-the-cuff rant by a worker surprised at his firing. He sounds more like a guy who orchestrated the whole thing as a career move into union organization. The local business agent periodically looks at his phone as though waiting for instructions. It should have been clear to him that the best way to look after the best interests of the drivers was to shepherd them back into the building and realize that the issue was one to be dealt with by contract stipulations not an unauthorized group action. The whole thing reminded me of the Marlon Brando movie "On the Waterfront." The major difference being that the strength of the union movement was on the rise back then. Now, whether one likes it or not, that is clearly not the case and for a small group of drivers to think they can dictate policy over BOTH the International Brotherhood of Teamsters AND the largest Teamster employer in the world is total folly. I wonder what their spouses, friends and neighbors think of their putting $60K-$70K jobs at risk for the sake of one union activist? Well, I do know what the building's part-timers who have been waiting for a full-time driver opportunity think, "Gee, thanks so much Mr. Reyes."

  • dudesbag by dudesbag Apr 4, 2014 11:32 AM Flag

    Apparently the furor over the Maspeth drivers has not been viewed unfavorably by investors/traders. UPS is up about .4% or just under $99- not all that far from our all-time high of $105 and change. Most analysts have our 1 year price target in the $102-$110 range. Meanwhile, surprisingly recent analyst FDX upgrades were issued late last month by Deutsche Bank ($180) and Avondale Partners ($165). Argus has had them pegged at $173 for awhile. As I've stated before, based upon recent reports these prognostications seem a bit high to me. But I'm sure they're probably based upon the cost reduction plan that FDX says will make a considerable impact on FY 2015 and 2016 results. We'll see what the future holds...

  • dudesbag dudesbag Apr 3, 2014 4:05 PM Flag

    I may be way off base here but it's curious that the International Brotherhood of Teamsters website has no story on this Maspeth situation. If I was a betting man, I'd put money on the fact that the leadership is really angry that a business agent would put the entire center as risk over one long-term employees who's issues would be resolved within the grievance procedure spelled out in the contract language. They would probably be of the opinion that if business agents felt empowered to do this without prior Teamster national approval the end result would be chaos and be detrimental to the long-term prospects of the largest Teamster employer in the world and therefor a major lifeline to the Teamsters continued existence. If anyone has first hand information- not rumor- on this I wish they'd post it.

  • First off, there is a grievance procedure. It's in the union contract for a reason. UPS drivers know they are the highest paid delivery drivers in the world. The people who egged them on to do this- the local business agents- have nothing to lose personally. If they had done their job and warned the drivers of the dire consequences of their actions, I'd like to believe this would not have occurred. Above all, for any group of union employees to not be acutely aware of the fact that UPS is one of the last guardians of Teamster representation in the country is, in and of itself, the reason to not do this. Finally, they should know that with the advances in the processes of delivery (ORION), the drivers are more replaceable than ever. If they don't think there are an untold # of part-time workers who would love to become full-time drivers, they are insane. While this is a sad day for UPS and the Teamsters alike, these drivers simply have made a wrong decision by overriding a systematic approach (grievance procedure) that have served both parties well.

  • Reply to

    Smith highly respected?

    by dudesbag Apr 1, 2014 10:42 AM
    dudesbag dudesbag Apr 1, 2014 10:50 AM Flag

    Gee, here's something shocking. FDX is trying to fight off lawsuits filed by NY state and NYC related to the shipping of unstamped cigarettes thereby circumventing the taxation of 400,000 cartons of cigarettes. The lawsuits amount to $239M so it's not chump change we're talking about here. I guess the question of "did FDX know what they were doing will be determined in the court proceedings. The fact that they are party to the suit would indicated what the AG's think.

  • Despite a track record of personal and business shenanigans that would make many blush, a Fortune Magazine survey still solidly places FDX founder Fred Smith in the top 50 most admired executives in the country. So I guess his early criminal activity, early financial fraud and present utilization of the highly dubious independent contractor model in the fastest growing segment of his business are trumped by his "wholesome image." Just think if every other company resorted to deflecting corporate responsibility for a large segment of their employees in the way of taxes and benefit coverage? How would the state tax structure and the workman's compensation/unemployment compensation systems survive? Yet, this guy is repetitively recognized as a beacon of the American businessman? Please, someone write an expose' on this creep....

  • We all know how EPS #'s can be manipulated thru buybacks, lowered forward guidance and a few other financial gimmicks. To that point, in the last 5 years, 64% of companies have surpassed their EPS expectations. The companies who's shares rise after their analyst earnings calls are those that report revenue beats along with forward guidance that either confirms or increases existing expectations. Considering that, I took a look at the UPS and FDX revenue growth expectations. Once again, it's a bit of apples and oranges since the FDX fiscal year ends in May, 2014. But, analysts expect them to report revenue increases of 2.5% for 2014 and 4.8% for 2015. Meanwhile, UPS is projected to come in at 4.8% and 5.5% respectively. As I've mentioned in other posts, I've been having a hard time understanding how FDX can meet their EPS expectation with compressed profit margins and what would appear to be lesser revenue growth than UPS. I guess we'll simply have to wait and see.

  • Reply to

    My Take on Things.....................UPS

    by upsoars Mar 25, 2014 9:45 PM
    dudesbag dudesbag Mar 26, 2014 10:58 AM Flag

    Morning Mike. Boy, I wish I was as enthusiastic as you on the share movement this year. No doubt the Cologne hub expansion will prove to be a great step forward. I'd much rather have the UPS strength in Europe vs. the FDX advantage in Asia. But I'd be amazed if that translated into a share price of $117.19 by year's end. If our sales team is able to hold onto the Amazon account by convincing them of the veracity of our upgraded hub networks and the weather gives us a break for this year's peak, then maybe $105 or so would make sense. But we're going to fact another compressed Christmas week so the hiring for next year peak will again be excessive. The other thing is if that $117 level is reached, the P/E would be at 22.4 unless we markedly increased earnings. There's just so much uncertainty domestically, not to mention in the world political environment, it just seems that your looking for the absolute best case scenario. Hopefully that happens but of late the trend doesn't seem to be our friend (to that degree). All that said, obviously I hope you're right although it would kill the covered call strategy that many of us are engaged in.

    Sentiment: Buy

  • This is becoming rather curious. After FDX reported their big $.24 Q3 (Dec, Jan, Feb) miss, their Trailing 12 month P/E ratio moved up to 25.13. This is what happens when expectations are missed. By comparison, UPS Trailing 12 month P/E is 21.13 indicative of a better valuation. But here's the major point to be made. The UPS forward P/E for 2015 is 16.43. That's based upon an expectation of increasing earnings per share from $5.22 this year to $5.93 next year. That $.71 is a very reachable goal. In order to meet their forward P/E projection of 15.04, FDX would have to see their EPS move from $6.67 to $8.82 which is a $2.15 move vs. UPS's $.71. So, in effect, FDX would have to more than triple the EPS increase that UPS is projecting to meet their forward P/E projection. Considering that UPS has much better operating and profit margins than FDX (not too far from double), such an outcome is hard to imagine. But then again, analysts expected them to hit the EPS # this last quarter and look what happened! If I was a betting man, I'd have my $$ on the UPS side of the table.

    Sentiment: Buy

  • Reply to

    FDX misses by $.24

    by dudesbag Mar 19, 2014 8:37 AM
    dudesbag dudesbag Mar 19, 2014 11:28 AM Flag

    mljt- This might be one of the most uninformed posts in quite some time. UPS as you must know if you follow these stocks reported its December results in January and warned in advance. You're correct in noting that the dubious FDX ground tactic of utilizing what they refer to as "independent contractors" in that business segment saves them $$. It's also immoral, an insult to the American taxpayer and reflects a profit at all costs corporate mentality. Fred Smith should be demonized not lionized.

  • Reply to

    FDX misses by $.24

    by dudesbag Mar 19, 2014 8:37 AM
    dudesbag dudesbag Mar 19, 2014 9:10 AM Flag

    Where is everybody? To add a few further observations that surprise me. First, FDX is now nicely up in the pre=market. That surprises me when one considers that thus far, they have not had the huge impact they had hoped via their cost containment/restructuring program, the had to borrow money to fund a share buyback program, their dividend is so middling and their express division remains under pressure. But what do I know, I'm not an analyst.

UPS
98.00+0.65(+0.67%)Apr 17 4:00 PMEDT

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