United Parcel Services Inc.
), the world's largest express carrier and package delivery
company, is set to release its third quarter 2013 results before
the opening bell on Oct 25, 2013.
In the last quarter, the company managed to meet its earnings
estimate. Let's see how things are shaping up for this
Factors to Consider This Past Quarter
The company has taken various strategic measures such as
collaborations with other leading firms, a well-defined business
model, constant technology upgrades and freight rate hikes to
maintain its industry leading position. Additionally, the
company was engaged in the expansion of distribution facilities
dedicated to health care in the key markets of North and South
America to tap the opportunities in the health care business.
However, we remain concerned about a sluggish European market
and the heavy expansion plans that the company is undertaking
internationally. Economic instability in Asia has further
aggravated the risk of the company as a significant portion of
its revenue come from international markets. Further, UPS
operates in a competitive environment which only gets worse with
Our proven model does not conclusively show that UPS is likely
to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to
happen. Unfortunately, this is not the case here as elaborated
Negative Zacks ESP:
This is because the Most Accurate estimate stands at $1.15 while
the Zacks Consensus Estimate is higher at $1.16. This leads to an
ESP of -0.86% for UPS.
UPS' Zacks Rank #3 (Hold), however, increases the predictive
power of ESP. Nevertheless, we also need to have a positive ESP
to be confident of an earnings surprise call.
We caution investors against the stock going into the earnings
announcement, as a Zacks earnings ESP of -0.86% combined with a
Zacks Rank #3 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some companies to consider as our model shows these
have the right combination of elements to post an earnings beat
XPO Logistics Inc.
) has earnings ESP of +20.46% and carries a Zacks Rank #3
Old Dominion Freight Line Inc.
) has earnings ESP of +2.90% and carries a Zacks Rank #3
) has earnings ESP of +2.47% and carries a Zacks Rank #3
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UTD PARCEL SRVC (UPS): Free Stock Analysis
XPO LOGISTICS (XPO): Free Stock Analysis
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