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UPS Earnings and Revenues Top Estimates in Q1, Rise Y/Y

United Parcel Service, Inc . UPS reported first-quarter 2018 earnings of $1.55, beating the Zacks Consensus Estimate of $1.54 per share. The bottom line also increased 17.4% on a year-over-year basis. Results were aided by strong performances from the International and Supply Chain and Freight segments.

Revenues improved 10% to $17,113 million from the year-ago quarter, outpacing the Zacks Consensus Estimate of $16,443.6 million. This upside was driven by strong demand for UPS solutions.

Segmental Details

U.S. Domestic Package revenues climbed 7.2% year over year to $10,227 million in the first quarter, owing to improved revenues across all products. On the contrary, segmental operating profit (adjusted) declined 20.4% to $756 million due to rough weather conditions among other factors.

Segmental average daily package volumes expanded 4.6%, backed by a 4.1%, 9.3% and 4.3% rise in Ground products, Next Day Air services and Deferred Air products, respectively. Average revenue per piece for the segment was up 2.6%.

International Package revenues improved 15% to $3,533 million. Daily export volumes rose 12% in the quarter under review on the back of premium products outpacing non-premium products. Segmental operating profit increased 15% to $594 million as well.

Supply Chain and Freight revenues grew 16% to $3,353 million. Operating profits in the segment increased 14% to $170 million in the first quarter. Segmental results were boosted by impressive revenue-quality initiatives, growth strategies as well as structural cost reductions.

United Parcel Service, Inc. Price, Consensus and EPS Surprise

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

Other Details

In the first quarter, the company's capital expenditure was $1.5 billion. Also, UPS distributed approximately $840 million to shareholders.

2018 Outlook

The package delivery company expects adjusted earnings per share for the current year in the range of $7.03-$7.37, unchanged from its previous expectation. The Zacks Consensus Estimate for the metric stands at $7.22 per share. Free cash flow is anticipated between $4.5 billion and $5.0 billion.

Meanwhile, the effective tax rate is projected at 23-24% for the remainder of the year. Also, the company's capex is likely to be in the band of $6.5-$7.0 billion.

Zacks Rank & Key Picks

UPS carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Cathay Pacific Airways Ltd. CPCAY , Gol Linhas Aereas Inteligentes S.A. GOL and SkyWest, Inc. SKYW , each with a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Shares of Cathay Pacific Airways, Gol Linhas and SkyWest have gained more than 11%, 75% and 53%, respectively, in a year.

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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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