What's in the Cards for United Parcel's (UPS) Q4 Earnings?
United Parcel Service, Inc. UPS is scheduled to report fourth-quarter 2022 results on Jan 31, before market open.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 7.94%.
Let’s see how things are shaping up for United Parcel this earnings season.
Q4 Expectations
The Zacks Consensus Estimate for United Parcel’s fourth-quarter 2022 revenues and our estimate for the same are both pegged at $28.09 billion, indicating 1.15% year-over-year growth.
The Zacks Consensus Estimate for fourth-quarter U.S. Domestic Package revenues is pegged at $18,442 million, indicating 4.2% growth from the year-ago reported figure. An increase in revenue per piece due to robust improvement in all products is likely to have boosted segmental revenues.
The Zacks Consensus Estimate for fourth-quarter International Package revenues is pegged at $5,432 million, indicating 0.6% growth from the year-ago reported figure. An increase in revenue per piece is expected to have aided segmental revenues.
The Zacks Consensus Estimate for fourth-quarter Supply Chain and Freight revenues is pegged at $4,257 million, indicating an 8.9% decline from the year-ago reported figure. Softness in the air and ocean freight forwarding operations is likely to have weighed on the segmental revenues.
On the flip side, high fuel costs are likely to have dented UPS’s bottom-line performance in the to-be-reported quarter. Supply-chain challenges are likely to have hurt operations. Notably, the Zacks Consensus Estimate for UPS’s fourth-quarter 2022 earnings has been revised downward by 1.6% in the past 90 days.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for United Parcel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
United Parcel has an Earnings ESP of -1.21% and a Zacks Rank #3.
Highlights of Q3
United Parcel's third-quarter 2022 earnings of $2.99 per share beat the Zacks Consensus Estimate of $2.84. The earnings beat was primarily due to higher delivery prices. Favorable pricing more than offset the downside caused by declining shipping volumes. The bottom line increased 10.33% year over year.
Quarterly revenues of $24,161 million, however, fell short of the Zacks Consensus Estimate of $24,319.8 million. The top line increased 4.2% year over year, driven by the uptick in revenue per piece shipped.
Stocks to Consider
Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat their fourth-quarter 2022 earnings:
American Airlines AAL has an Earnings ESP of +9.79% and a Zacks Rank #2. AAL will release results on Jan 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Airlines has an expected earnings growth rate of more than 100% for fourth-quarter 2022. AAL delivered a trailing four-quarter earnings surprise of 8.62%, on average.
The Zacks Consensus Estimate for AAL’s fourth-quarter 2022 earnings has been revised upward by more than 100% in the past 90 days.
JetBlue Airways JBLU has an Earnings ESP of +6.77% and a Zacks Rank #3. JBLU will release results on Jan 26.
JetBlue has an expected earnings growth rate of more than 100% for fourth-quarter 2022.
The Zacks Consensus Estimate for JBLU’s fourth-quarter 2022 earnings has been revised upward by 58.3% in the past 90 days.
Norfolk Southern Corporation NSC has an Earnings ESP of +1.33% and a Zacks Rank #3. NSC will release results on Jan 25.
NSC has an expected earnings growth rate of 9.29% for fourth-quarter 2022. NSC delivered a trailing four-quarter earnings surprise of 4.06%, on average.
NSC has a long-term expected growth rate of 8.96%.
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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
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United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
