1Q Earning Release

[wkmac]

Haven't read the entire article yet but a couple of highlights happen to stick out for me. There was mention about the recent lane enhancements and as I understand more will come as the year moves forward. But the biggest thing that jumped at me was the ground package volume has increased by 6.2% and I'm going on the assumption that figure relates to a daily volume figure. Being the big behemoth we are that's a large move IMO. Just a couple of years ago we were trodding along just below 3% ground growth as concerns were that FDX, DHL, etc. were starting to carve UPS up for their benefit. To be honest I'd also like to see what out churn percentage is now verses then. Reducing churn IMO should be a huge priority across the board that would make that 6.2% figure go even higher.

Today? DHL is in trouble and I've reason to believe at the very least we are keeping pace in pure numbers of packages with FDX's ground growth. With the current lane enhancements along with near future enhancements and a continuing good economy in the area of movement of goods especially internet orders, this ground growth trend may likely accelerate which has another positive especially for UPS FT Teamsters. Further volume growth especially in the enhanced lane areas may over capacity existing feeder runs and thus UPS would be forced to add further feeder runs to meet demand. This also opens not only slots to fill for package drivers moving up to feeder but as a need to add even more package drivers to handle additional volume. In other words, more FT top paying jobs for UPSers.

Then again IE could go in and screw up PAS/EDD even further and then claim "according to our latest studies (read pull a rabbit out of our ass) we've determined we can operate with even less drivers in light of the higher volume and still have them come in after 9 pm and the local/service sorts can do the impossible of unloading and processing that volume and still meet the new pulltimes imposed by the lane enhancements." Ask an IE person what "On Time Network" is and they look over at the nearest TV set!

 

[OldManAllowance]

Is it me or when ever we post a double digit increase in profit we are rewarded by a lower share price. Maybe those folks at Enron were on to something.

 

[wkmac]

Is it me or when ever we post a double digit increase in profit we are rewarded by a lower share price. Maybe those folks at Enron were on to something.

I looked at the shareprice and roared with laughter just knowing the posts that would follow. I hope you didn't look at FDX because it was up. Reasoning behind that is "if UPS has done this then FDX should do such and such" so upward it goes. I've seen the reverse when FDX reported and tipped down slightly while UPS went up as the same rational towards UPS took place. Nature of the game.

I think the reason is that our shareprice already reflects what UPS reported and there will be a little profit taking for the moment. Had we beat the numbers soundly like reported 92 cents a share, then the stock would have risen as that profit level isn't factored into the current stock price.

I'd not be surprised to see the shareprice flounder for the next several weeks until some other news comes out to lend support of the shareprice going up or rather giving analysts who cover further reason to believe the 2Q estimates are doable. Once we get some news that either propels the overall market higher or something that is specifically good for our sector or for UPS specifically, then just enjoy for once that we'll likely hangout shareprice wise in the low $80's with a potential dip into the high $70's. Sure beats that up/down cycle a few years ago of low 50's to low 60's and then back down again.

 

[Dfigtree]

You say ... DHL is in trouble

But on the streets I see more and more yellow.

 

[brett636]

You say ... DHL is in trouble

But on the streets I see more and more yellow.

and most of those yellow trucks are probably mostly or totally empty.

 

[Dfigtree]

Yellow picked up my Dell laptop for repair and delivered it, too. I know a laptop doesn't take up much space, but that's not empty.

 

[tieguy]

You say ... DHL is in trouble

But on the streets I see more and more yellow.

Probably driving around frantically looking for their lost package volume.

 

[upsdawg]

The shareprice went down ,but hopefully this is temporary! I can understand the threat of gas going up to >$3 a gallon would impact the price of our stock---but it should have the same impact on FedEx also!!!!

I recently ordered a new comforter and pillows for my King's Lair on EBAY---the company that was selling the item uses DHL---I tried to convince them to use UPS------they told me that DHL does not charge them any O/S but actual weight. I rec'd the package in 2 days instead of the 6 days that UPS would have taken and the company was charged a 5lb rate-------the box would have been an O/S 3 with UPS!! Tha package came from new Hamp to Calif---so it must have trveled a portion of the way by air with DHL--they have to be operating at a loss----but they can afford to subsidize their volume until they capture more ......and more......and more market share.


I see a lot of Yellow vans---but think that it is just because the color is so bright, you can't help but see them----not that there are more of them--just that I am more aware of them!!

 

[tieguy]

Strong growth in all sectors. NDa volume grew almost 10 percent. International 29 percent. Ground 6 percent. Very impressive. If you remember fdx reported a 3 percent loss of domestic NDA volume when they reported last month.

 

[upsdawg]

Growth across all sectors---according to Reuters , there was a low performance from the Supply Chain Solution side of UPS-----anybody know what the expectations were--and why we are off??

I am thinking that the SCS side of UPS is where we will see tons of new revenues coming in to offset the loss of ground volume??

 

[wily_old_vet]

Growth across all sectors---according to Reuters , there was a low performance from the Supply Chain Solution side of UPS-----anybody know what the expectations were--and why we are off??

I am thinking that the SCS side of UPS is where we will see tons of new revenues coming in to offset the loss of ground volume??

Dawg-LOSS of ground volume????

 

[Coldworld]

big brown freighttrain steaming down the track, you have two choices hop on or get flattened. just wait until overnite gets rebranded, ups will see double digit growth there too. double digit growth in express, thanks to churn from fedex. Six percent growth in ground with ups is equal to what percentage of ground from fedex, anyone know? tie?

 

[Coldworld]

lets say 6 percent is equal to 50 million packages, so what would that same amount of packages be as apercentage to fedex since we dele=iver so much more than them.

 

[Hangingon]

I just hope they start doing something with the contract talks, alot of the big shippers forecast a year ahead or more when deciding who to ship with and that date is getting closer.

 

[upsdawg]

Dawg-LOSS of ground volume????

I am saying that it was something that UPS has been doing---giving up some not very profitable ground volume--but indicating $1 Billion in new SCS revenues-----but because our ground volume was down----irregardless of how much new SCS Revenues that we had, it was held against us by Wall Street!! So if we had $10 billion in new SCS business and our ground volume was down 1% Wall Street would always focus on our Ground Volume and not the fact that we may be willing to give up some unprofitable/less profitable ground business to focus on the SCS market.---But , the 1 Qtr Earnings report came in and gound volume was up and the SCS was not---and that is ok for Wall Street-----but I am not so sure that that is the direction that UPS wants to take-----the Supply Chain Market is a $300 billion industry!!

 

[browniehound]

Looks like UPS is getting some of that lost volume back

 

[tieguy]

SCS includes Menlo and Overnight. Keep in mind those two business are being integrated into our business right now. Menlo moved from Ohio to Louisville and Overnights fleet being upgraded and rebranded. I'm sure that is costing us money.

 

[worldwide]

upsdawg posted "I recently ordered a new comforter and pillows for my King's Lair on EBAY---the company that was selling the item uses DHL---I tried to convince them to use UPS------they told me that DHL does not charge them any O/S but actual weight. I rec'd the package in 2 days instead of the 6 days that UPS would have taken and the company was charged a 5lb rate-------the box would have been an O/S 3 with UPS!! Tha package came from new Hamp to Calif---so it must have trveled a portion of the way by air with DHL--they have to be operating at a loss----but they can afford to subsidize their volume until they capture more ......and more......and more market share"

A couple things.

1. What is the name if the company in NH shipping DHL?

2. Let them operate at a loss. DP is a public company and thie 1st class mail monopoly in Germany (read-their cash cow) expires next year. No public company, no matter how big, can lose monmey forever.

I would rather UPS price prudently and go after profitable packages. Let DHL takes the OS3 packages and fly all that iar across the US. They are not making much headway in the US, as evidenced by UPS' first quarter numbers. They are not a viable competitor for a couple more years. Fedex on the other hand is always one to be concerned with...

 

[moreluck]

You got a good 'pop' the day before and also an 'up' the day before that. Wall St. always seems to react positive on the speculation of the good news rather than the 'actual' good news.

My eyes stuck to the Eskew statement...paraphrasing here.....that UPS is in a better position in the transports than any other company (something like that).

That increase of a million pkgs. a day had to come from somewhere. We hear the drivers here on the boards saying how heavy volume is...like peak season. I'm not a businesswoman, but I'd be willing to bet that we are taking marketshare back from the "inept" delivery companies....not naming names.

 

[moreluck]

Just a little positive 'blurb' from Motley Fool....

UPS (NYSE: UPS) was another topper. The parcel-delivery specialist earned $0.89 a share this past quarter. That may have been just a penny better than the $0.88 per share that analysts had forecast, but it came at the right time. How many transportation-related companies are cureently smarting over higher fuel costs? Even though many are passing it along to end users via fuel surcharges, delivery remains a tricky environment at the moment. That's why it's commendable for UPS to beat the street by any margin -- much less come in comfortably ahead of last year's $0.78-a-share showing. What can Brown do for you? If you're a shareholder, it can deliver the goods in the most inclement of financial weathers.