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On The Fly: What to watch in UPS earnings report.

UPS (UPS) is scheduled to report results of its fiscal first quarter before the market open on Wednesday, July 25, with a conference call scheduled for 8:30 am ET. What to watch for: 1. GUIDANCE: When UPS reported its fiscal first quarter results on April 26, it reaffirmed its fiscal 2018 adjusted earnings per share guidance of $7.03-$7.37. At that time, consensus estimates were $7.24. During the company's Q1 earnings conference call, UPS said it's well on the way to achieving FY18 financial targets and the company expects EPS growth higher in Q2 and Q3. 2. FEDEX RESULTS: On June 19, FedEx (FDX) reported Q4 adjusted EPS of $5.91 and revenue of $17.3B against analyst expectations of $5.68 and $17.24B, respectively. During the Q4 earnings conference call, FedEx CEO Frederick Smith said he has never been so optimistic in all his years at company. 3. EUROPEAN INVESTMENT PLAN: On May 14, UPS announced that it officially opened its new 32,000 square metre package sorting and delivery facility in the south east of England. At GBP120M, the new London Hub is one of UPS's largest single infrastructure investments outside of the United States in the company's history. Located at the DP World London Gateway Logistics Park, the new building will act as a UK package processing hub and distribution centre for the local area as well as a gateway to UPS's global logistics network, with capacity to process up to 28,000 packages per hour and room for further expansion. More than 500 employees will operate out of the new operations hub. On June 26, UPS announced it opened a new 30,000-square-meter, advanced technology package sorting and delivery hub outside Paris in Corbeil-Essonnes/Evry. The new Paris Hub facility, which employs nearly 1000 people, facilitates cross-border trade and enhances package delivery service in the Ile-de-France area. The building is equipped with advanced technology, automated sorting equipment and has the potential to sort up to 37,000 packages per hour, which is more than twice the capacity of the two facilities in Chilly-Mazarin and Savigny that it replaces. The new $100M facility is a part of the company's multi-year, $2B European investment plan, which aims to modernize and expand the UPS network across the continent. 4. AGREEMENTS WITH TEAMSTERS: On June 22, UPS and the International Brotherhood of Teamsters announced that they reached a tentative agreement. The five-year agreement, which is subject to ratification, covers Teamsters-represented UPS employees in small package roles. On July 13, UPS announced a tentative agreement for a new Master UPS Freight Agreement with the International Brotherhood of Teamsters. The five-year agreement, which is subject to ratification, covers about 11,000 Teamsters-represented UPS Freight employees.

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Publication:The Fly
Date:Jul 24, 2018
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