In a recent conference-call analysis for FedEx
The package-delivery company reported net earnings of $0.78 per share in the first quarter, down from $0.89 per share year over year. Excluding charges related to upgrading its fleet of aircraft, and to a voluntary layoff program, earnings totaled $0.96 per share, in line with analyst estimates.
While revenue growth increased just 3.3% for the quarter, the numbers weren't too worrisome, given the U.S. economy's recent "softness." And as we learned from FedEx, that domestic sluggishness mostly equates to a slowdown in China.
Speaking of China, UPS announced that it has been granted permission to construct an international air hub at Pudong International Airport in Shanghai. The facility is expected to become operational next year; it couldn't come at a better time, given FedEx's recent announcement that it will offer domestic express service in China beginning this summer.
Looking ahead, UPS' management is sticking with its annual guidance of 6%-10% growth in adjusted diluted earnings per share, making the company a solid long-term prospect. Couple its steady growth with a healthy 2.3% yield, and it's no mystery why UPS was selected by our Motley Fool Income Investor newsletter.
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Fool contributor Jeremy MacNealy has no financial interest in any company mentioned. FedEx is a Motley Fool Stock Advisor selection. The Motley Fool has a disclosure policy.
