Upcoming AWS Coverage on Expeditors International of Washington

LONDON, UK / ACCESSWIRE / February 10, 2017 / Active Wall St. announces its post-earnings coverage on United Parcel Service, Inc. (NYSE: UPS). The Company disclosed its fourth quarter and fiscal year 2016 results on January 31, 2017. The world's largest package-delivery Company reported a loss in Q4 2016, impacted by a $1.90 per share pension charge. Register with us now for your free membership at:

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One of United Parcel Service's competitors within the Air Delivery & Freight Services space, Expeditors International of Washington (NASDAQ: EXPD), is estimated to report earnings on February 28, 2017. AWS will be initiating a research report on Expeditors International of Washington following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on UPS; touching on EXPD. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended December 31, 2016, UPS' revenue rose 5.5% to $16.93 billion compared to revenue of $16.05 billion in Q4 2015; however it missed analysts' consensus estimates of $17.00 billion.

For Q4 2016, UPS reported net loss of $239 million, or $0.27 per share, compared to net income of $1.33 billion, or $1.48 per share, a year earlier. Excluding non-recurring items, including a $1.90-per-share mark-to-market pension charge, adjusted earnings per share came in at $1.63, which was below Wall Street's estimates of $1.69 per share. The charge is related to the Company's defined benefit pension programs for employees.

Segment Performance

US Domestic: During Q4 2016, UPS' US Domestic segment delivered record volumes. Average daily shipments increased 5.0% to 19.6 million, ground products were up 5.4%, driven by more than a 25% jump in SurePost volume. US Domestic's revenue was up 6.3% to $10.9 billion in the reported quarter. Fuel revenue was a benefit to the top-line growth by about 20 basis points. Next Day Air shipments increased 4.4% and Deferred Air was up almost 3% on a y-o-y basis.

Ecommerce Impact

UPS stated that strong market demand for its ecommerce solutions created a significant shift in product mix during Q4 2016. The Company's ecommerce shipment grew at 11.5% in the reported quarter, as it reached a number of historic levels during Q4 2016, including 55% B2C, the largest volume increase in the quarter and the highest month ever at 63% B2C in December 2016. UPS also delivered to an additional 2.5 million new addresses during the reported quarter.

The Company's average delivery stops increased 4.6% and average daily volume was up 5%, yet through the power of ORION the Company had daily package miles to only 3/10 of a percent increase. Total cost per piece growth was held to 6/10 of a percent including a 3/10 impact from fuel. As a result, operating profit was relatively flat at $1.338 billion for Q4 2016 compared to $1.346 billion in Q4 2015.

International: UPS' International segment produced strong volume growth across all major products. The segment's revenue increased 5.0% to $3.34 billion and up 6.2% on a currency-neutral basis. The International segment's Q4 2016 operating profit was $281 million, while adjusted operating profit climbed more than 13% to $706 million, another record level for the segment.

During Q4 2016, UPS' International segment export shipments were up 8.4%, driven by strong growth across a number of regions and products. The Asia region was up 20% and intra-Europe export saw over a 10% increase.

UPS' Supply Chain & Freight segment grew top-line tonnage and shipments, but the Company stated that it is still managing through tough market conditions. Specifically, the Forwarding and Freight units remain challenged by overcapacity in the market. In the forwarding business tonnage increased in Air and Ocean Freight for the first time in more than a year. The unit saw mid-single-digit growth in tonnage for Air Freight. Ocean Freight produced strong results as tonnage and profits increased y-o-y.

UPS Freight returned to growth, producing modest increase in revenue, tonnage, and shipments. The segment revenue increased 2.6% on a y-o-y basis to $2.7 billion. Supply Chain & Freight's operating loss was $139 million; however, on an adjusted basis, the segment posted operating profit of $179 million.

Balance Sheet and Cash Flow

UPS returned more than 100% of net income to shareholders in FY16 as the Company purchased more than 25.5 million shares for approximately $2.7 billion and paid out another $2.8 billion in dividends, up approximately 6.8% over the prior year. Through 2016, UPS generated healthy cash from operations, producing over $6.5 billion. The Company had capital expenditures of nearly $3.0 billion during FY16.

Outlook

UPS expects FY17 adjusted diluted EPS to be $5.80 to $6.10, which includes $400 million of pre-tax currency headwinds. For FY17, the Company expects tax rate to remain around 35%. For FY17, the Company expects total revenue to grow 5% to 7%. CapEx is expected to be around $4 billion for the year.

Stock Performance

On Thursday, February 09, 2017, the stock closed the trading session at $106.46, marginally up 0.28% from its previous closing price of $106.16. A total volume of 2.42 million shares have exchanged hands. The Company's shares are trading at a PE ratio of 27.63 and have a dividend yield of 2.93%. At Thursday's closing price, the stock's net capitalization stands at $91.30 billion.

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SOURCE: Active Wall Street