The Deutsche Post second-quarter earnings report is tomorrow. Considering the previous quarterly report, this guide will forecast the company’s second-quarter earnings report. On July 7, 2021, preliminary results for the second quarter of 2021 were announced. Revenue surged by 26% year on year to €22.7 billion in the first quarter, while free cash flow increased by one-third to €1.9 billion [1].
EBIT (earnings before interest, taxes) tripled to about €2.3 billion. In addition, the company’s net income increased to more than €1.4 billion. According to CEO Frank Appel, the profit figures were first-quarter records [1].
The business earned €1.13 in earnings per share on a diluted basis, more than quadrupling its first-quarter 2020 results. According to the organization, quarterly operating cash flow more than tripled to €3 billion, while free cash flow increased to more than €1.4 billion. Free cash flow is frequently negative in Deutsche Post DHL’s first quarter, which is typically its weakest of the year.
Its Global Forwarding, Freight division saw forwarding revenue increase 32.7% year on year to €4.8 billion. This business also comprises its European road transport activities, which increased by 43.6% to €3.59 billion[1]. This was due to an 18.2% increase in airfreight volumes to 494,000 tons, as well as an 8.8% increase in the Freight division – primarily due to demand from Asia to North America.
Meanwhile, its Supply Chain division, which was exposed to a large-scale overhaul following the disposal of its Chinese assets, saw revenue remain unchanged at €3.24 billion, while EBIT increased by 59% to €167 million. The relatively young e-commerce segment increased revenue by 46% to €1.8 billion, as strong demand in 2020 spilt over into 2021. The supply chain segment, which had lagged behind the other divisions due to the impact of the COVID-19 pandemic on customer activity, recorded 4.7% organic sales growth to €3.8 billion [1].
Given the current profits growth, the Group EBIT for 2021 is forecast to exceed €7.0 billion. This includes around €200 million in additional expenses for the one-time corona bonus.The Group now anticipates a free cash flow of more than €3.2 billion for the fiscal year 2021. In 2021, gross CAPEX is estimated to be around €3.9 billion.
Stock Analysis
Deutsche Post has continued to move upwards for the past five months. The recent low came on March 5 with a low of $48.49. The company’s most recent high came on July 7, when it breached above the $70 mark, trading at 71.28. The 9-day moving average indicates the positive trend will continue for the German company.
Deutsche Post’s next resistance level, based on its upward trend, is $71, which was its latest high. If the price breaks through $71, it may see some demand on to the next resistance of $80. However, the price may see some downturns. Furthermore, the stock is trading well above its 48 support level [2]
- https://www.dpdhl.com/content/dam/dpdhl/en/media-center/investors/documents/presentations/2021/DPDHL-Preliminary-Results-Q2-2021-Presentation-2021-07-07.pdf
- https://finance.yahoo.com/quote/DPSGY/analysis?p=DPSGY
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Adnan Abdul Rehman
Market Analyst
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