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

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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