This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

UPS Underscores Economy's Woes

Stocks in this article: UPS

Both UPS and FedEx say they will reduce costs this year by $1 billion. UPS has reduced its U.S. workforce by more than 10,000 people.

Meanwhile, railroad data released on Thursday seemed to support a glum assessment. Union Pacific (UNP), a principal shipper of container cargo, said first-quarter revenue from container shipping fell by 22%, while revenue from shipping industrial products fell by 29%. Union Pacific did, however, beat earnings estimates.

Rail shipment data compiled at railfax.transmatch.com also provided little indication of an impending recovery. In the first quarter, rail shipments in several key areas declined precipitously, then rebounded. But in recent weeks shipments have leveled off or declined.

"Intermodal traffic is dragging along at a low level," said Drew Robertson, who maintains the site and heads New York-based transportation consulting firm Atlantic Systems. "And I am surprised by continuing weakness in coal traffic and grain. People aren't buying U.S. grain and fewer factories are using electricity."

As far as an economic recovery, "everyone was hoping for a V, which would be a sharp recovery," Robertson said. "Now they expect a U, a slow recovery stretched out over time, and they aren't making purchase decisions." In the worst case, he said, the pattern could become a W, "where the recovery sinks back down."

In its first quarter, excluding items, UPS reported earnings of $517 million, or 52 cents a share. Analysts surveyed by Thomson Reuters expected 56 cents. Revenue fell $13.7% to $10.9 billion and missed expectations of $11.4 billion. In the same period a year earlier, UPS earned $906 million, or 87 cents a share.

The per-share earnings exclude an impairment charge of 12 cents related to the earlier-than-expected retirement of aging aircraft, as UPS moved to set aside its entire fleet of 44 DC-8 aircraft. Including this noncash charge, the company earned 40 cents a share.

Consolidated average daily volume fell 3.9% to 14.54 million packages, down from 15.13 million a year earlier. Average revenue per piece declined 6.9%, reflecting changes in product mix, lower fuel surcharges and weight per package, and negative currency impacts.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs