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Non-Tech : FedEx (FDX)

FDX 260.89

+0.7%

9:39 AM EST

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To: The Prophet who wrote (451)	12/4/1999 7:59:00 PM
From: Don Dodge	Read Replies (2) of 524

Good point. Here are the profit numbers. I have repeated the revenue numbers just for clarity. Revenues 1997 FDX was $14.2B while UPS was $22.5B 1998 FDX was $15.9B while UPS was $24.8B 1999 FDX was $16.8B while UPS will probably be $26.0B Most recent quarter FDX was $4.3B while UPS was $6.7B Profits 1997 FDX earned $196M while UPS earned $909M 1998 FDX earned $503M while UPS earned $1741M 1999 FDX earned $631M while UPS will probably earn $850M Most recent qtr FDX earned $159M while UPS earned $577M The 1999 UPS numbers are distorted by a huge $854M loss in the June qtr which I think is attributable to the Teamsters strike. If not for this one time event earnings would probably be about $2200M for 1999. Still, given these numbers I would expect UPS to be valued about 3X the FDX valuation, not the more than 6 times FDX valuation we see today. Is UPS over valued or is FDX under valued? Or are both reasonably valued and this is the premium the market gives to the ground delivery leader?

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