Fly Intel: What to watch in UPS earnings report

UPS (UPS) is scheduled to report results of its fiscal fourth quarter before the market open on Thursday, January 31, with a conference call scheduled for 8:30 am ET. What to watch for: 1. GUIDANCE: When UPS reported its third quarter results on October 24, 2018, the company backed its fiscal 2018 adjusted earnings per share guidance of $7.03-$7.37, against analyst expectations of $7.25 at that time. "Improvements in revenue quality and our new, highly-automated capacity gives us confidence in a successful peak season for our customers and shareowners," said UPS CFO Richard Peretz, adding that UPS expects Q4 adjusted EPS to increase about 15%, despite anticipated currency headwinds in emerging markets and one less operating day during peak season. 2. FEDEX RESULTS: On December 18, 2018, FedEx (FDX) reported Q2 adjusted EPS of $4.03 and revenue of $17.8B against analyst expectations of $3.94 and $17.75B, respectively. FedEx also cut its FY19 outlook and cited European weakness. The company said, "FedEx is unable to forecast the fiscal 2019 year-end mark-to-market retirement plan accounting adjustments. As a result, the company is unable to provide a fiscal 2019 earnings per share or effective tax rate outlook on a GAAP basis. These forecasts assume moderate U.S. domestic economic growth and no further weakening in international economic conditions from the current forecast. Management still expects to realize the benefits from TNT Express that were anticipated when the company was acquired. However, lower-than-expected express package volume due to European economic weakness that accelerated during the quarter and is expected to continue, and a change in service mix following the June 2017 cyberattack on TNT Express, will delay the anticipated realization of these benefits. As a result, the target to increase FedEx Express operating income by $1.2B to $1.5B over fiscal 2017 results will not be achieved in fiscal 2020." 3. UPSNAV: On December 4, 2018, UPS announced it has integrated a new navigation tool called UPSNav into the handheld device its package delivery drivers carry, providing them with turn-by-turn directions derived from UPS's routing software. UPSNav reduces miles driven, fuel consumed and carbon emissions, while empowering the company to provide better service to its customers, the company stated.

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