Which Blue Chip Shipping Stock Has the Strongest Earnings Trends: UPS or FedEx?

February 03, 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’).

Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!

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

United Parcel Service, Inc. (NYSE:UPS): Current Price $79.97

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

Annual revenue at UPS has shown a rising trend after 2009, and so did EPS until 2011. But earnings plunged in 2012.

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	-1.83

Quarterly revenue trends have been mixed, but sales moved up sharply in the latest December 2012 quarter. Unfortunately, EPS went the other direction, reporting a massive negative figure. Will FedEx show better trends? Let’s find out…

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