UPS versus FedEx: Which Stock has the Strongest Earnings Trends?

March 23, 2013

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Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here is your Cheat Sheet to how the top 2 shipping stocks rank via earnings trends:

United Parcel Service, Inc. (NYSE:UPS): Current Price $84.45

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	51,490	45,300	49,540	53,100	54,130
Diluted EPS ($)	2.94	1.96	3.33	3.84	0.83

Though there is steady growth in the annual top-line at UPS , profits hit a wall in 2012.

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter	Dec. 31, 2011	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012
Revenue ($) in millions	14,170	13,140	13,350	13,070	14,570
Diluted EPS ($)	0.75	1.00	1.15	0.48	-1.80

We shudder to see the huge loss per share reported in the December quarter, because profits took a beating owing to pension related charges.

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