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United Parcel (UPS) Q1 Earnings: Disappointment in Store?

United Parcel ServiceUPS is scheduled to report first-quarter 2017 results on Apr 27, before the market opens.

In the last quarter, the company posted a negative earnings surprise of 2.98%. The company reported earnings of $1.63 per share, missing the Zacks Consensus Estimate by 5 cents. Earnings increased 3.82% year over year. Revenues improved 5.5% over the year-ago quarter to $16.93 billion, lagging the Zacks Consensus Estimate of $16.96 billion. Let's see what awaits the company in the first quarter.

Price Performance

Shares of United Parcel underperformed the Zacks categorized Transportation - Air Freight and Cargo in the last six months. The stock lost 1.95% while the industry fell 1.21%.

Factors Likely to Influence this Quarter

United Parcel struggled in the most recent holiday season, thanks to higher package delivery costs. The escalated costs are likely to hurt first-quarter 2017 results. Foreign currency-related headwinds are also expected to hurt the first quarter results. Unfavorable product mix and weakness in industrial production may dampen the company's first quarter performance.

However, the company's decision to hike dividend by 6.4% in the first quarter is encouraging. United Parcel's efforts to expand and grow its top line also raise optimism. In a bid to speed up operations in the U.K. and European truckload brokerage operations, the company acquired Freightex Ltd in Jan 2017. The expanded product portfolio might aid first quarter results.

Earnings Whispers

Our proven model does not conclusively show that United Parcel will beat the Zacks Consensus Estimate this quarter as well. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for United Parcel is -0.77% as the Most Accurate estimate is pegged at $1.29 while the Zacks Consensus Estimate is at $1.30. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: United Parcel carries a Zacks Rank #4 (Sell). Please note that Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

United Parcel Service, Inc. Price and EPS Surprise

United Parcel Service, Inc. Price and EPS Surprise | United Parcel Service, Inc. Quote

Stocks to Consider

Investors interested in the transportation space may consider the following stocks. This is because our model shows that these companies possess the right combination of elements to post an earnings beat this quarter.

American Airlines Group AAL has an Earnings ESP of +3.64% and a Zacks Rank #3. The company will report first-quarter results on Apr 27. You can see the complete list of today's Zacks #1 Rank stocks here .

C.H. Robinson Worldwide CHRW has an Earnings ESP of +2.50% and a Zacks Rank #3. The company will report first-quarter results on Apr 25.

Air Lease Corporation AL has an Earnings ESP of +1.16% and a Zacks Rank #3. The company will report first-quarter results on May 4.

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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.


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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