United Parcel Service Stock News

United Parcel Service (UPS) is one of the leading logistics company and is known for its efficient system. UPS is very active in research and has recently designed a new mechanism for its transport vehicles. UPS has found that they can save money if they only take right turn. This case study is now being discussed heavily in supply chain areas. UPS has recently reported its performance during the first quarter of 2014 for fiscal year 2014. The earnings have gone down by 5.8%; the share price is now $0.98 instead of estimates, which were of $1.08. Company has also reported a decline in revenue; revenues reported a drop of 2.6%. Company reported that its total profits have decline as compared to previous year, profits were down to $1.5 billion after a decrease of $106 million. The major reason reported was harsh weather conditions because of which expenses were increased and total profits went down. Although the total number of deliveries were up by 4.2% and the number of customers availing this service also increased. UPS’s stock price is down by 0.4%.

US domestic package segment reported an increase in revenue by 2.6% and was reported to $8.5 billion with a daily volume improvement of 4.2%. However, there was a decline in operating profit of $158 billion. A contraction of 220 basis points was reported in operating margin. The change in product mix has also reflected a decline of 1.5% revenue per package. 

International package segment revenue was up by 5% during this quarter. The operating profits also showed an increase of 12% and were reported at $438 million. This segment also showed an improvement in operating profit margin and it was up to 220 basis points this was linked to improvement in network efficiency.

Supply chain and freight segment also showed an improvement in operating profits, it was up by 3.5% and were reported at $148 million. Operating margins were also up by 30 bps. This improvement was a result of better performance of forwarding and distribution unit. UPS freight’s unit also reported an increase in revenue by 3.1% but total profits were adversely affected because of harsh weather conditions.

Severe winter is directly related to decline in profits of UPS. This condition effected the whole transportation and freight industry. This is a classic example of how a company so successful in operations can be affected just by some natural conditions according to UPS chairman the whole economy has suffered because of these harsh weather conditions and several companies have shown decline in profits in first quarter. He says that after the streamlining of weather condition the expenses of the company will go down and profit will increase and company is very likely to regain its original position.

Failure in Stocks – Identifying the Key Factors Behind Stock Failure

Failure in stocks means that a company’s stock price has declined compared to its previous period value. This decline in stock price could be short term in where company regains its high stock price value instantly or it could be a permanent decline where company’s decreased stock price value will extend to long periods. 

The basic supply and demand mechanism is operating behind the rise and fall of stock prices. When there is some positive news or anticipation about a company then more and more investors will wish to hold its stocks. This will drive up the demand for company’s stock and there will be a greater value attached to its stock price. On the other hand when there is some bad news or actions circulating the company then more investors will wish to sell off its stock. This in turn will decrease the demand for company’s stocks. Hence; there will be a downward push in the stock price of this company.

There are number of factors that are responsible for the failure of stocks and some of the most prominent ones are; changes in laws and regulations, changes in the management structure of  company, failure in mergers and acquisitions, failure of products launched by company, good performance by competitors, and expectations and news surrounding the company. 

The most recent and notable failures in stocks were caused by one of the above mentioned factors. Recent and significant example regarding failure in stocks is that of EBX Group. It could not deliver on its promised production of oil and as a result its stocks price went through a drastic decline of over ninety five percent within one year. J.C. Penney can be used as another example for major recent failure in stocks. It decided to bring in changes to the company’s structure without doing thorough evaluations and as a result it stocks value fell down to $14 from $42. Sears Holdings is another major company that has experienced a failure in stocks recently. It has made a wrong investment decision by preferring technology department over its department stores chain and marketing actions. As a result there was a sharp decline in stocks price of the company and it had to bear net loss worth $800 million within three years.

Reasons Why Bank of America is a Strong Buy

Introduction

As the name suggests, Bank of America (BAC) is an American multinational and financial services banking corporation. It began as the small regional North Carolina National Bank and has now evolved and grown into not only one of the largest financial institutions in the US by assets but also in the world, providing services to clients and customers spanning over 145 countries.  The bank’s clientele includes private customers, SMEs and SMMBs (small-and middle-market businesses) as well as multinational corporations with a complete set of banking, investment, managing assets and other products and services related to risk management.  After acquiring Merrill Lynch at the start of 2009, BAC entered the group of the world’s elite wealth management firms and is at the forefront of corporate and investment banking and commerce.

Recent Bank of America stock news shows that the bank is having a strong performance in the stock market and those looking for stocks to invest in will do well to give BAC stocks a look or consideration. The following are a few reasons why:

  
Strong Capital Base

BAC is formidably capitalized such that it does not need to raise any new capital, which makes it a less dangerous option. Moreover, BAC’s aggressive efforts to concretize and ensure financial discipline by restructuring, cost cutting, and sales of assets, gives BAC stock prices a strong base. Actually, BAC stock analysis and stock estimates indicate that the firm is well on schedule to cut about US$8 billion in yearly cost by the end of the 2nd quarter in 2015. The upshot of this commitment is that BAC’s Tier 1 Capital Ratio, the financial and banking sector’s measurement of financial soundness and stability, at 9.94% as at the 4th quarter of 2013, puts it at the top of the list of the largest banks in the US. Therefore, when looking for a financially strong bank, Bank of America Corp fits the bill.

Book value per stock

Another reason why BAC stocks are a strong option come in the form of the bank’s real book value per stock, which as of the 3rd quarter of 2013, was at US$13.62, signifying a reasonable 2.3% increase in comparison with 2nd quarter figures of the same year and a percentage increase on 3rd quarter numbers of 2012. BAC stock analysis indicate an upward performance potential for its overall book value as a result of discount schemes offered on its tangible book value. The bank’s total book value per stock rose by 1.6% coming in at US$20.50 in the 3rd quarter of last year compared to the previous quarter, and increased by 0.5% over 3rd quarter figures for the year before.  With BAC stock price currently at US$16.70, the bank is trading at over 6% premium to real book value and at more than 29% discount on overall book value per stock.

Share performance

Over 2013, Bank of America Corp stocks rose 51% and are current trading at a premium to real or tangible book value per stock. Compared to other companies like J.P. Morgan Chase (JPM), Goldman Sachs and Wells Fargo, the BAC stocks still have some ways to go to top these firms or catch up with them. This is due to the fact that BAC has been through some difficult times based on astonishing provision expenditures and charge-offs. Of course, BAC stocks, in terms of book value, were not aided by the bank’s nationwide acquisitions.  However, with a 51% increase in the previous year, Bank of America Corp stock analysis indicates a strong performance and certainly a healthy stock to hold.

Stable Fund

BAC stock news and other underlying market information and trends show that the company is on track to return to its primary revenue earning potential. BAC has posted some very positive numbers in the last couple of years. The banks overall loan facilities and leases grew to US$934.4 billion and increased by 1.4% in the 3rd quarter of 2013.  There was reasonable growth across board in the BAC franchise, which bodes well for BAC stock prices and earnings. Deposit growth in total volume was up 2.7% in the last quarter of 2013 and over 4.4% over the previous year’s volume.  The figures also indicate a strong quality in the bank’s loan and asset facilities.

It is common knowledge that BAC encountered serious problems concerning bad loans due to abysmal underwriting ethics and principles. This setback have been fixed and net charge-offs, are slowly but steadily falling and, as of the 3rd quarter in 2013, remained at US$1.7 billion, representing a considerable jump and improvement of 59% and there are indications that the trend will be the same for the foreseeable future. The astonishingly massive losses of credit provisions witnessed in 2012, particularly in the 4th quarter, of US$2.2 billion (approximately minus 86%) and also in the 3rd quarter of the same year of US$1.8 billion (approximately minus 83%) seems to be a thing of the past as such losses dropped sharply, standing at US$0.3 billion as of the 3rd quarter of last year. Compared to the 2nd quarter of last year alone, credit provision losses fell by as much as 75%. This shows that bank has clearly made genuine strides in arresting its quality asset maladies.

Significant Sector Results

BAC sector performances have also done the bank’s stocks a world of good. The Consumer and Business Banking sector have posted higher earnings at the back of lower provision expenditures, thereby increasing net income by 28% to US$1.8 billion as of the 3^rd quarter of 2013. On the other hand, the Consumer Real Estate Service sector came in with a net loss of $1 billion accounted for by a lower industry’s mortgage banking revenues and increasing market litigation costs. Revenue of US$$4.4 billion represented a US$0.7 billion net income from BAC’s Global Wealth and Investment Management unit by the same period of last year. There was also a 5.5% year on year average deposits growth to US$239.8 billion in the Global Banking unit and the global market sector witnessing an equity earnings increase of 36% year on year in 2013. With these numbers BAC stocks represent a strong investment option.

In conclusion these reasons among others make Bank of America Corp stocks a considerably solid option. Analyst across board expects a strong performance from the company in 2014 and investors will do well to keep an eye on the company’s stocks and, if possible, invest in them.

Ups and Downs of the CBS

Background of CBS

Second only to the British Broadcasting corporation (BBC) in terms of size globally, CBS is an award-winning American commercial mass media company. Given the shape of its logo, it is sometimes referred to as the “Eye Network” and also as the “Tiffany Network” due to the excellent quality of programming across its platforms during the fifties as the company broadcasted from the Tiffany & Co Building. CBS has humble beginnings dating back to 1928 when William S. Paly acquired a number of radio stations (16 in total,) which were then held by the United Independent Broadcasters Inc. (UIBI). Having put these radio stations into one conglomerate, he then named the establishment Columbia Broadcasting Corporation (CBC), which has now become CBS, in short. The trademark name CBC was officially registered in 1974 and the full name, Columbia Broadcasting Corporation, went out of use. CBS was bought by Westinghouse Electric Corporation in 1995, but kept the name. In 2000, Viacom took control of CBS and split the company into 2 entities: the CBS Corporation and the CBS TV Network. Summer Redstone presently runs National Amusements the company though.

The Road to Success

CBS’ journey to success has been long and can, today, pride itself in being at the very top of the enterprise.  The company’s revenue of US$3.91 billion posted in Q4 of 2013 was an increase of 6% on the US$3.70 billion recorded in the fourth quarter of the year before. Content writing and allotment proceeds were the primary drivers of this growth, raking in a 28% rise. The big performances by these units were in themselves boosted by increases in domestic and foreign licensing of the company’s TV programmes. In addition, a 7% growth in revenues generated from affiliate and subscription charges, were, mainly, a reflection of rising cable partner charges, retransmission profits, and charges from the company’s partner TV stations. Revenues from advertising stayed fairly at 2012 levels, with a 4% rise of revenues balanced by local broadcasting bringing in low revenues in terms of political advertising.

Revenues

For Q4 of the previous year, CBS posted US$793 million in operating income, representing a 9% increase on the US$726 million record in the year before (2012). The company also recorded US$927 million for adjusted OIBDA for the same period of 2103, which is a 7% growth as compared to the US$866 million posted for Q4 in 2012. The growth in operating income and OIBDA were pushed by higher revenues. However, the company’s commitment to investing in TV content and higher stock-based payment to its stockholders (attributed to rising CBS stock prices) meant that generated revenues were equipoised by increased in investment spending. With adjusted net earnings from ongoing operations coming in at US$477 million for Q4 of 2013 or a per diluted share (PSD) of US$0.78, compared to the $414 million, or the US$.64 PSD of the year before, CBS had a strong year. In addition, ongoing operations recorded a reported net earnings of US$465 million for Q4 of 2013 or a PSD of $0.76, representing an increase from 2012 Q4 figures of US$403 million or US$0.62 PSD. These increases are attributable to CBS’ currently running share buyback programme and are a reflection of growth in operating income and lower weighted average shares outstanding.

Sources of revenue

Not included in adjusted net earnings from ongoing operations and adjusted OIBDA are reorganization fees of US$20 million (with a $12 million, net of tax) for Q4 of 2013 and a 2012 Q4 figure of $19 million (plus a $11 million, net of tax), basically for the restructuring and termination of some specific business operations, in addition to early contract termination expenses.

CBS’ Q4 earnings were driven by higher television programming licensing charges and demand for the network’s cable shows. This capped a year in which the value of the network’s content was a hot topic of national debate.  Q4 of 2013 witnessed a 19% increase in net income for CBS with all of its major units including cable network, TV entertainment and publishing reporting higher revenues. These numbers are testament to CBS’s ability to put in consistently stellar performances year-on-year since the birth of modern commerce: even more so in 2013. A US$0.78 of adjusted earnings per share (EPS) exceeded analysts’ projection of US$0.76. The company’s entertainment group, which comprises its digital properties, the CBS TV Studios and the CBS network, cumulatively reported an increase in revenue by 11% to US$2.2 billion. Sales from advertising and television programming licensing for streaming and syndication were the main catalyst behind the growth according to CBS. CBS also reported a 4% increase in advertising sales.

Future Outlook

CBS witnessed an 8.4% increase in revenue to US$15.2 billion with a corresponding net income increase of 19% to US$1.9 billion in 2013.  The cable network division, which is responsible for Smithsonian Networks, CBS Sports Network and Showtime, reported a jump in revenue to US$477 million representing a 7% increase.  This strong performance was attributed to higher charges from pay TV providers and licensing of original series from Showtime. Industry analysts believe that CBS’ additional value comes from quality content via digital sales of the network’s programming in addition to syndication agreements both domestically and internationally. The upshot of this is that the company relied less on sales from advertising.

New book releases from its publishing division also boosted revenues as Simon & Schuster, publisher under CBS, raked in US$225 million (5% increase) coupled with releases of best-selling novels including Doris Kearns Goodwin’s “The Bully Pulpit” and Rush Limbaugh’s “Rush Revere and the Brave Pilgrims”.

Conclusion

Given the humble beginnings of CBS, the success story it has become can only be applauded. Through shrewd investments, quality programming and diversification, the company has placed itself in a strong positions to compete with the big boys in the entertainment business for the foreseeable future. The future only looks bright. The expectations of industry’s analysts are that the company is going to have an even bigger year in 2014 as compared to 2013.