UPS Delivers Profits

February 2, 2022 Good morning traders! Welcome back to The Daily Setup. Markets were up again yesterday, as a number of companies reported earnings beats. Here’s what’s on the docket today: - UPS, Exxon, and Google report earnings - India is getting into crypto Let’s get over the hump this week. See ya tomorrow. Nick How’d the markets look? Market Outlook 👀 DOW 35,405.24 +0.78% S&P 500 4,546.54 +0.69% NASDAQ 14,346.00 +0.75% BITCOIN $38,700.96 +0.66% UPS, Exxon, and Alphabet BIGGEST MOVER UPS Delivers Profits UPS (UPS) delivered its [Q4 earnings report]( early Tuesday morning at a time when it thought nobody would be home to sign off on the package. However, unlike those botched deliveries we’re all familiar with, this report yielded excellent news for the company and its shareholders. Shares were up 14% by market close Tuesday after the shipping company announced that it had blown past analyst expectations for earnings and group revenue while also boosting their quarterly dividend. - [Here are the numbers]( you want to see: UPS earnings for Q4 2021 were at $3.25 per share, up 55.75% from the same period last year. Group revenues rose 11.5% to $27.8B, higher than the Street’s estimate of $27.1B. - UPS execs also cleared a 49% [dividend increase]( to $1.52 a share, which will be paid out on March 10th to shareholders of record on February 22nd. - One of the biggest success areas for UPS is its [Small and Medium Business (SME)]( services. SME services have increased from 20% of volume to 26%, widening the shipper’s margins. This is great news for the suits over at UPS, but when treated as a sample for the market as a whole, it could indicate good news for the rest of us too. UPS pulled a similar stunt in their Q3 earnings report, beating expectations and [claiming a strong foundation for Q4 success](. Even then, broad pessimism at the time hammered the stock. It’s the same story but different dance this time around, as the stock had a big gain yesterday. With that in mind, this recent behavior could indicate we’re coming out of the weeds of the sell-off as contingencies like new Covid variants ultimately didn’t affect the performance of big players like it has in the past. ExxonMobil is Cooking With Gas Get ready to throw another juicy earnings report on the grill because Exxon Mobil (XOM) just dropped a spicy plate of [Q4 earnings]( on Tuesday. It appears that rumors of a market downturn may have been greatly exaggerated as the gas giant joins the list of companies posting excellent earnings reports in the wake of January’s sell-off. Shares rose 6.2% after the report revealed that XOM had raked in their [largest profit in almost 8 years](, causing the stock to hit its highest point since April 2019. - XOM reported [$85B in revenue]( and earned an adjusted $8.8B (or $2.05 per share). Revenue pretty much matched expectations while earnings blew past analyst predictions of $8.2B. - The company also unveiled its plans for a [$10B share buyback.]( This became possible as they managed to pay off [$9B of debt]( taken out at the beginning of the Covid-19 pandemic in 2020. It’s important to note that the largest contributing factor to XOM’s success this quarter is the price that we’ve been paying at the pump. When those go, business for Exxon and its competitors probably won’t look as impressive. Add to that the increasing rejection of high-carbon fuel and XOM’s sustainability comes into question. Execs at the oil giant see the writing on the wall and have spun their low-carbon solutions businesses into its own division. With plans to spend [$15B in the sector through 2027](, Exxon is positioning themselves well for the future. Regardless, this adds to the trend of favorable earnings reports which should buoy the markets for the time being. The Old 20-1 Split is a Killer Google’s parent company Alphabet ([GOOG]() [beat analyst expectations]( and announced a split, but not in a disappointing way like the final episode of How I Met Your Mother. Driven by strength in advertising and cloud services, Google (sorry, I’m just not there yet with the whole Alphabet thing) tallied EPS of $30.69 vs. estimates of $27.34 and revenue of $75.33B against projections of $72.17B. The company is also splitting its shares 20 to 1. - Ad revenue was $61.24B for the quarter, up 33% from the same period last year, while cloud services revenue rose 45% to $5.54B. - YouTube advertising came in at $8.63B, missing the projected mark of $8.87B. Maybe the world’s children have finally had their fill of toy unboxing videos and Mr. Beast. - The Other Bets unit, which includes self driving auto unit Waymo and life science unit Verily, contributed a paltry $181M. Shares surged roughly 8% after hours Tuesday. The quarter continued a hot streak for the company, which was up 65% last year, outpacing the S&P 500 and the tech sector. The stock split, while cosmetic in nature, may be a nice catalyst to continue upward momentum as retail investors may be willing to buy more shares with a perceived lower barrier to entry. It’s still going to need to split a few more times to qualify for [Fidelity’s Low Priced Stock Fund]( though. Taxes and Cricket, That's What India Does Token Talk India is simultaneously embracing digital assets while smashing crypto investors’ skulls with a ball peen hammer. The country announced plans to [roll out a digital Rupee]( over the coming year, which is a 180 from [previous rumors]( that it would ban crypto entirely. What government giveth, government taketh away, as India will tax crypto at 30%… an amount that even California Governor Gavin Newsom finds excessive. - Finance Minister Nirmala Sitharaman outlined the plan to deploy a central bank issued digital currency during the current fiscal year as well as a framework to regulate and tax crypto. - India is a major hub of crypto investment and transactions, with an estimated 15 to 20 million investors. Which sounds like a lot but is less than 2% of its population. - In addition to the 30% levy, India will also implement a 1% deduction on sources of payments used to purchase crypto. The Beatles must’ve written "Taxman" during their travels through the subcontinent. India could be a massive market for crypto because India could be a massive market for well, everything. Besides the big dogs like Bitcoin (BTC) and Ethereum (ETH), investors might want to take a look at Polygon ([MATIC]() for exposure to the growing Indian market. The token was launched by an India startup and is currently the twelfth largest digital asset with a market cap of $16.45B. AT&T Says Dracarys Deals and Rumors As Carrie and the gals would say “and just like that”, AT&T ([T]() took away the only reason most people buy its stock, slashing the dividend in a [massive corporate restructuring](. The company announced that it is spinning off WarnerMedia in a $43B transaction as well as chopping the dividend like Joffrey did to poor Ned. The market reacted poorly as shares were down 4.24% on Tuesday. - The newly liberated WarnerMedia will be merged with Discovery ([DISCA](). Existing AT&T shareholders will receive 0.24 shares of WarnerDiscovery for every big T share that they own. [Some older men]( will receive less than others. - The new dividend will be $1.11 per share, down from $2.08 and crushing one of the last bastions of income investing. - Pour one out for Time Warner, which has been part of more failed marriages than Larry King. First AOL, then AT&Tâ¦. Mr. Right is out there somewhere, you just have to keep the faith. WarnerDiscovery has a fast growing asset in HBO Max, which ended 2021 with 74M subscribers but still faces an uphill battle in the streaming space against Netflix ([NFLX]() and Disney+ ([DIS](). Color me skeptical that the combination of CNN, HBO, and Warner Bros can compete with the combination of Marvel and Star Wars or the house of Stranger Things and Cobra Kai. Link Roundup 📿 Other News Other News Link Roundup - The combo that literally nobody asked for – Pepsico Announces Rockstar with Hemp Infusion ([link]() - To quote The Offspring, "why don’t you get a job?" – There Were 4.6M More Jobs Than Unemployed Workers in December ([link]() - Stop, recall time – Tesla Recalls 50k vehicles due to Rolling Stop Mishaps ([link]() - Missed it by THAT much – Paypal misses targets and falls after hours ([link]() - GM Grand Slam – Automaker Posts Record Earnings ([link]() Shorts in the Winter Time, [via @cap_zay]( Questions or concerns about our products? Call or text us on your mobile: (410)-775-8315 © Copyright 2020, [RagingBull]( - [Refund Policy]( - [Privacy Policy]( - [Terms & Conditions]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. 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