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UPS Misses, Guides Lower, Blames Miss On Surge In Business, "Weather Events"
Moments ago UPS released its Q4 earnings which missed EPS expectations of $1.43, printing at $1.25 instead (too bad it was not a bank or it could just add back half of SG&A to the bottom line and slap a 10% tax rate on it). Additionally, the company concurrently lowered full year 2013 guidance saying "Full-year 2013 adjusted diluted earnings per share are expected to be $4.57, below the previously provided guidance of $4.65 to $4.85." Good to know the guidance cut waited until literally the last possible moment for it to be revealed. Naturally, one of the factors blamed for the miss was the weather: "weather events in December weighed on results." Events? But the punchline is the other thing UPS blamed for missing earnings (and supposedly for the weaker forecast): a surge in business! That's right - for the first time ever a company blames too much business... for not generating enough business. "U.S. results were negatively impacted by the challenges of the compressed peak season coupled with an unprecedented level of online shopping that included a surge of last-minute orders. In an effort to maintain service standards and commitments, UPS took extraordinary measures deploying additional equipment and people. For example, the company utilized 85,000 temporary employees, 30,000 more than planned."
Unprecedented excuse aside, this means that 85,000 temp workers will drop from the January payrolls. However since they will promptly disappear from the labor force as well, expect the net impact of this action to lower the unemployment rate by another 0.1% or so.
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They should reinvent themselves as a social media stock, delivering dreams in a box. Wham 2000% increace in stock price within a week
I may not be a smart man, but I know what wheather happened in 1st qtr 2014....
Humans used to blame bad crops on the gods. Now we are so much smarter we feel silly saying that, so now we blame the weather. It was much simpler in the past, we could just throw a virgin into the volcano or rip their heart out, but now we must tax the world, while living in a cave for fear of the dreaded...weather. Blaming bad outcomes on externalities rather than our own choices will always be preferable.
Makes sense. When you see a UPS driver come up to your door at 8:00 PM in a Budget rental truck.....they're paying some serious OT.
Wow, you must have the same UPS delivery guy I do.
My brother witnessed a delivery driver using a Uhaul (they at least put a label identifying it as UPS/Fedex) make it up a very steep, snow covered, icy hill that he lives on top of. Told me he could hear it coming up and that the guy had it buried the whole way (can't believe he made it because sometimes 4 wheel drive has trouble getting up). The kid driving jumped out and yells "holy shit...almost didn't make it!". Brother figured the truck would need a new tranny/motor in a week after that.
Soylent Green... is... people...
UPS employees (not all obviously), particulary the drivers are lazy POS'. One of the guys I work with tapped (literally nudged) a UPS truck going 3 mph. The UPS employee filed a worker's comp claim and missed out on about 3 months worth of work. The Insurance Co's got involved and eventually the fuckhead got his lazy ass back to work. When the guy I worked with asked his Insurance Co. about how ludicrous this was, the rep for the Co. said this happens a lot now.
People just don't want to work... Period.
This trend is not limited to UPS. But hey, with MOAR FREE this that and anything else, WTF are you doing going to 'work' and missing out on having your days off?
MOAR free shit brigade!
"People just don't want to work... Period."
You mean like politicians and Wall Streeters, yes?
One anecdotal story of an insurance fraud is pretty flimsy for making broad assertions. On the whole, UPS is a tightly run company and workers there have to hump it to keep up.
I think it's BTFD time for UPS.
Yes...next year they will get er done..and it will cost more
I think so, or something is rotten on their balance sheet. Plenty of business, should be meeting expectations. Management can't do math?
https://plus.google.com/100178088897707358813/about?gl=us&hl=en
Their customer service isn't helping either. Wild animals run this location.
From a recent personal experience I'd give Customer Service @ UPS high marks AFTER I was able to talk to someone...getting to someone was the PITA.
We are now couch potatoes....we are so lazy we cant even go to the store now....and we are stupid..we will buy a $20 trincket and spend $50 to overnight it somewhere....
Or spend $100 just to get the 'free' (parcel post) shipping when all you want is a $15 pair of made in Banglanam no iron kakhis?
Fear not! I promise today's market participants will promptly ignore this bad news and then, when we get next quarters tepid beat, the guide down will be forgotten and treated like the massive economic recovery is moving strongly along... so you better buy or be left behind! (This is getting to be an old game, eh?)
Bullish for Bezo's Drone Delivery Systems Inc.
Meh, just glad I am short HSBC. After so much abuse, I'd like to see another short pay out (for a change). UPS is still hiring in our area.
Yes..Lucky! The Magical Roulette Wheel of BS Excuses lands on 'Weather' once again...what are the odds?
They hired all those temps for the extra business, and they still couldn't get shit delivered on time. I'd say they have bigger issues than just "the weather".
Yeah, their share price should have been higher. If the share price was higher they would have earned more revenue and at higher profit margins.
Laugh if you want, but I have a feeling we'll live long enough to hear somebody ACTUALLY say that someday.
Gee, here is a healthy segment....lets see if we can kill it too!
http://www.nssfblog.com/infographic-target-shooting-in-america/
So they have more business than they can handle, and are loosing money?
So, u are thinking something isnt right?
Yea...uh...no idea. Did the cost of hiring the extra workers cause the decline in revenues? It's not like people don't pay upfront for the delivery.
Losing, not Loosing you dumb arse
Billy, it is a damn poor mind that can only think of one way to spell a word. (Andrew Johnson)
Lyndon
Missing expectations is not the same thing as losing money.
Not only are they loosing money, but they are losing it too.
I had an 8 week job at a consumer goods distribution centre as they geared up for the spring/summer merchandise and was laid off last night one week in. The place was dead quiet most of the week I was there, coupled with the Baltic Dry Index prices crashing I wasn't at all surprised even if disapointed.
What possibly could surprise us now?
Liberty!
True enough!
Add: Life! and Property!
If one reads ZH they may not be surprised, but I bet that if we took a few mainstream economists to follow me around a few factory and warehouse jobs I've had lately they'd be surprised (if they could handle standing on their feet for 8 to 12 hours).
Don't you know by now that what we experience daily is anecdotal or irrelevant. It is important that we not believe what we see with our eyes and only believe what we are told. We are but simple people, unable to fully understand what we see. We lack the analytical skills to collate this data into anything meaningful. So when you next experience what you perceive as unemployment, tell yourself that it is just your mind playing tricks on you. You are an important part of the "economic plan" and while you don't have an official "job", your real job is to spend, to stimulate, be it from earned or unearned income. Don't try to figure this out. Rely on the smart people to tell you when to jump and how high. They know best.
trust me
I'm pretty surprised corporations are starting to tell the truth about their earnings and that the government is not fabricating better numbers as a result. When I first read someone say they may want to crash the markets themselves, I thought it was the dumbest thing I ever read..now I'm not so sure.
The key is to gradually lower expectations.
Not sure the bdi is crashing so much as it's time for Chinese new year
Any chance this center was for jcp?
Does this have historical relevance or simply a new rationalization or "excuse"? I don't know, just asking. What was the BDI a year ago?
Biggest human migration each yr, shipping numbers crash, no surprise.
Try stockcharts $bdi to see pattern.
And avoid staying long thru Jan 31, just saying
Was talking to a kid over Christmas that was working for Cabelas (seasonal) and he figured he would be gone by mid/late Jan. I guess if you like seasonal work the job opportunites are probably plentiful?
the onion-ification of the world continues ...
unrelated but newsworthy i thought...the MoneyChangers might be getting a little nervous....
blood dont come from turnips...
"Jan. 16 (Bloomberg) -- A Detroit bankruptcy judge denied the city permission to pay UBS AG and Bank of America Corp. about $165 million to end interest-rate swaps that have cost taxpayers $202 million since 2009.
U.S. Bankruptcy Judge Steven Rhodes today refused to approve the settlement with UBS and Bank of America’s Merrill Lynch unit. Rhodes called the $165 million payment plus a fee of more than $4 million “too high a price.”
“The court will not let the city continue hasty decisions,” Rhodes said. It’s not in the best interest of Detroit to “enter into bad deals” to solve its financial problems, he said."
I wonder how many other local gubbermints bankers are porking up the ass with ir swaps?
2008/2009 redux as the shadow bankers scramble for liquidity and quality collateral?
How many trillon dollars later to go nowhere?
It's not the liquidity stupid, it's the solvency and lack thereof...
This is a fun game. what other reasons might be at play? NFL playoffs are an obvious one...people watchign TV instead of ordering products. Then i'm sure we'll have the Olympics also reducing commerce.
edit: I'm dumb, thinking of summer olympics
Surge in Business........like Yogi said when he walked into a overcrowded restaurant...."this place will never make it's too crowded "
this too, is bullish
UPS and FedEx will get squeezed and bled dry by Amazon's success at squeezing out the small online merchant. 10 years, 5 years ago, UPS had a far wider client base.
At this point no-profit Amazan controls UPS, and to a lesser extent FedEx.
When relatively few customers dominate your business, they will set your prices.
UPS sat back and have Amazan the best shipping rates while the little guys paid 50% more. Now the little guys are gone and UPS is left with the ugliest girl at the dance.
their crappy service will kill amazon too in the end.
Good for Amazon. I only ship via UPS if I wnat the package to arrive damaged and late.
Locally Amazan has a lot of orders delivered by a company started by Russians . They sent an African driver to my house in a beat up truck to deliver some housewares. The truck was falling apart. UPS will look like that before long, or they will fold , thanks to their choice of partner.
don't worry about davis, he got plenty
How about all those empty malls? You can see plenty of vacant commercial property signs for the future.
Nothing to worry about. If amazon has taught me anything, it is that when you lose money on every order, you can make it up on volume.
This is so bullshit! So I've notived that everytime a company comes out with bad results... the first thing we hear is excuses!
If it's a great lie and everyone likes the content.... it gets dismissed........
This is going to end badly!
the simple metric contained in this report is that paying people to do things is simply insupportable and negative for the bottom line. look at the ridiculous over valued and solely financially based melt up in stocks..and people constantly wonder while market valuations can soar to ridiculous levels and perpetually statistical downward revisions of unemployment and the highly massaged and corresponding stats of so called rising employment gains paint the tape to signify economic growth while real employment numbers such as labor force participation and broad based indices of actual employment continue to plummet. these anomalies simply reinforce the absolute disconnect between actual and fundamental standards of economic activity, i.e.,supply and demand, productivity, and true price discovery versus the rarefied atmosphere of the gaseous bubble inflated by wallstreet financial instruments such as derivative bets, counterparty obligations, interest rate swaps, CDOs etc.
.simlarly, the idiotic eye wash of FED propaganda of employment and inflation targets as the ultimate justification of unprecedented currency debasement is not only erroneous and actually insane, but comprises a cynical and systematic concerted effort to dismantle, deconstruct and eventualy destroy any legitimate economic enterprise. UPS and thousands of other companies are but the symptomatic manifestations of this seemingly irrational and yet actually engineered systemic breakdown which actually rewards failure while penalizing success. in light of such a twisted and malignant policy there is not only no hope for "economic recovery" but quite to the contrary, an inevitable and catastrophic reversal of economic growth and activity.
Nice rant. Now go buy some PMs.
that was done back in 2007! thanks.
It is a good thing business wasn't even better- UPS might have been forced into bankruptcy.
lol!
"....the company utilized 85,000 temporary employees, 30,000 more than planned."
There's your December 'jobs growth'
Bring in the fellow who ran JCP.....he'll fix UPS for them....
A family member works in upper management for ups. I have held their stock a long time, and every few months it pays decent dividends which I buy silver with every time. It has gone up a lot this year, which makes me happy, and it has enabled me to add a decent bit to my stack as well. This kind of event where they are so busy they can't keep up with Christmas demand will be bullish I the long run, and could create some jobs. The down side of all this is that this is yet another nail in the coffin of the brick and mortar retail store. It showed that far more people are doing their shopping online rather than drive to the store and deal with crowds. I think this trend will continue to grow.
The "weather event" in quesiton lasted abotu 2 -3 days in any given part of the country. That ruined its numbers? What load of shit.
Culprit: High volume of packages coupled with a higher diversity of product delivery location.
Example: If you have a large volume (eg:100 pieces - enough to fill a UPS truck) of product to be delivered, to say: a bicycle retail store (one location), that's different than if that same number of products has to go to 100 different locations (because that lil bike shop isn't there anymore). UPS is not set up to handle that 'kind' of increase in volume, in terms of location variation/package. I don't care how good your "logistics" are.
Just a thought.
http://news.yahoo.com/wii-u-officially-disaster-nintendo-slashes-sales-f...
How can they compete with the MIC conditioning Vidya Games like Call of Dootie.
I expect better of zerohedge and those participating here.
In the real world when a business faces delays and backups it employs costlier options to get the job done and please customers. This means even if it means a loss on particular orders or even a bunch of them.
What a UPS likely did was incur costs by doing a number of things. Using air when customers paid for ground. Hiring temporary employees through agencies that do that work. Paying employees over time. These are all costs that hit the bottom line immediately. They are due to things like weather and unexpected business volume. What a good business does not do is anger customers. It takes the hit and gets the job done. The customer won't come back otherwise.
That's what they mean by "extraordinary measures deploying additional equipment and people". They incurred a whole bunch of cost and lost money on a lot of shipments but they got the job done best that they could.
This is what those of us in productive sector do. Hire contractors. Air ship. Do what it takes and worry about the cost later. If you don't do what it takes the short term profit won't matter because there won't be any long term. Only government protected cartels can afford to tell the customer to go fly a kite when things get tough.