United Parcel (UPS) Q3 Earnings: Disappointment in Store?

Leading logistics provider, United Parcel ServicesUPS is scheduled to report third-quarter 2016 results on Oct 27, before the market opens.

Last quarter, United Parcel's earnings met the Zacks Consensus Estimate. The company has surpassed estimates in three of the last four quarters with the average earnings beat at 4.23%.

Factors at Play

United Parcel's third-quarter earnings are likely to be adversely impacted by the volatility in foreign exchange markets. Given that the company operates across various geographical regions, currency-related woes can hurt the bottom line. Lower fuel charges are also expected to limit earnings growth. Moreover, United Parcel faces tough competition from peers like FedEx Corporation FDX .

However, we expect the company's top line to benefit from its high level of customer services and operational efficiency. United Parcel puts in considerable efforts for the constant training and development of its personnel and to improve its operations. We also expect the company's rapid expansion in various regions to boost revenues.

Earnings Whispers

Our proven model does not conclusively show that United Parcel is likely to beat the Zacks Consensus Estimate this quarter. 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 -2.78%, as the Most Accurate estimate stands at $1.40 while the Zacks Consensus Estimate is pegged at $1.44. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: United Parcel carries a Zacks Rank # 4 (Sell).

Note that, we caution against Sell-rated (Zacks Rank #4 and 5) stocks going into an earnings announcement, especially if the company has been seeing negative estimate revisions.

UTD PARCEL SRVC Price and EPS Surprise


Stocks to Consider

Here are two transportation companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Navios Maritime Holdings Inc. NM , which is expected to report third-quarter earnings on Nov 28, has an Earnings ESP of +16.00% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Green Plain Partners LP GPP is scheduled to report third quarter earnings on Nov 1. The company has an Earnings ESP of +2.33% and a Zacks Rank #2

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NAVIOS MARI HLD (NM): Free Stock Analysis Report

UTD PARCEL SRVC (UPS): Free Stock Analysis Report

FEDEX CORP (FDX): Free Stock Analysis Report

GREEN PLAIN PTR (GPP): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More