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Is a Beat Likely for UPS in Q3 Earnings on Delivery Demand?

United Parcel Service UPS is scheduled to report third-quarter 2021 earnings on Oct 26, 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 31.5%.

Let’s see how things are shaping up for UPS this earnings season.

Factors to Note

UPS’ third-quarter performance is expected to have been buoyed by high package delivery demand. Robust improvement in all products is likely to have driven revenues at the U.S. Domestic Package segment. The Zacks Consensus Estimate for U.S. Domestic Package revenues indicates a 6.5% increase from the year-ago reported number.

Strong demand in Europe is anticipated to have boosted International Package segment revenues. The consensus mark for International Package revenues hints at a 16.2% rise from the third-quarter 2020 reported figure.

However, the Supply Chain Solutions segment might have put up a weak show in the soon-to-be-reported quarter due to the sale of UPS Freight division. The Zacks Consensus Estimate for revenues at the Supply Chain Solutions segment implies a 5.3% decline from the year-ago reported number.

Rising costs across all segments are expected to have pushed up operating expenses in the to-be-reported quarter. This, in turn, might have hurt the bottom line.

United Parcel Service, Inc. Price and EPS Surprise

United Parcel Service, Inc. Price and EPS Surprise

United Parcel Service, Inc. price-eps-surprise | United Parcel Service, Inc. Quote

Earnings Whispers

The proven Zacks model predicts an earnings beat for UPS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: UPS has an Earnings ESP of +1.27% as the Most Accurate Estimate is pegged at $2.55, higher than the Zacks Consensus Estimate of $2.52. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: UPS carries a Zacks Rank #3.

Highlights of Q2 Earnings

UPS' second-quarter 2021 earnings (excluding a penny from non-recurring items) of $3.06 per share beat the Zacks Consensus Estimate of $2.75. Quarterly revenues of $23,424 million outperformed the Zacks Consensus Estimate of $23,085.4 million. While the bottom line surged 43.7% year over year, the top line increased 14.5%. Results benefited from higher package delivery demand.

Other Stocks to Consider

Investors interested in the broader Transportation  sector may also consider Old Dominion Freight Line ODFL, C.H. Robinson Worldwide CHRW, and Ryder System R, as these stocks too possess the right combination of elements to beat on earnings this reporting cycle.

Old Dominion has an Earnings ESP of +0.49% and a Zacks Rank #2. The company will report third-quarter results on Oct 27.

C.H. Robinson has an Earnings ESP of +1.06% and a Zacks Rank #2. The company will report third-quarter 2021 results on Oct 26.

Ryder has an Earnings ESP of +4.73% and a Zacks Rank #1. The company will release third-quarter 2021 financial numbers on Oct 27.


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United Parcel Service, Inc. (UPS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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