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UPS Gears up to Report Q1 Earnings: What's in the Offing?

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United Parcel Service (UPS - Free Report) is scheduled to report first-quarter 2022 earnings on Apr 26, 2022, before market open.

The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised upward by 2.9% in the past 90 days. The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 25%.

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

Factors to Note

Strong package delivery demand is expected to have aided UPS’ first-quarter 2022 performance. Higher revenue per piece is likely to get reflected in U.S. Domestic Package revenues. The Zacks Consensus Estimate for U.S. Domestic package revenues indicates a 5.7% increase from the first-quarter 2021 reported numbers.

UPS’ International Package revenues are expected to have been boosted by strong growth in all regions. The consensus mark for first-quarter International Package revenues suggests a 7.4% rise from the year-ago reported number.

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

 

However, supply chain challenges are likely to have hurt operations at UPS’ Supply Chain and Freight. High transportation costs within the company's supply chain solutions segment due to capacity constraints is expected to have dampened segmental revenues in first-quarter 2022. The Zacks Consensus Estimate for Supply Chain and Freight revenues in the first quarter suggests a 5.7% fall from the year-ago reported number.

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 +1.92%. The Most Accurate Estimate is pegged at $2.93, higher than the Zacks Consensus Estimate of $2.87. 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 Q4 Earnings

UPS reported fourth-quarter 2021 earnings (excluding 7 cents from non-recurring items) of $3.59 per share, beating the Zacks Consensus Estimate of $3.11. The bottom line rallied 35% year over year. Quarterly revenues of $27,771 million also outperformed the Zacks Consensus Estimate of $27,179.6 million. The top line increased 11.5% year over year.

Other Stocks to Consider

Investors interested in the broader Transportation sector can also consider stocks like Landstar System (LSTR - Free Report) , Knight-Swift Transportation Holdings (KNX - Free Report) and American Airlines Group (AAL - Free Report) , as these stocks too possess the right combination of elements to beat estimates this reporting cycle.  

Landstar System has an Earnings ESP of +9.22% and is a Zacks #3 Ranked stock at present. LSTR will release first-quarter 2022 results on Apr 20.

Landstar’s first-quarter results are expected to reflect gains from an improved freight scenario in the United States. Higher truck rates, due to tight truck capacity, are anticipated to have aided the March-quarter performance.

Knight-Swift has an Earnings ESP of +4.17% and is currently a #3 Ranked player. KNX will release first-quarter 2022 results on Apr 20.

Knight-Swift’s first-quarter results are expected to be aided by an improved freight scenario in the United States. Revenues in the Logistics segment are likely to have been strong due to an increase in load count and revenue per load.

American Airlines has an Earnings ESP of +3.01% and is a Zacks #3 Ranked stock at present. AAL will release first-quarter 2022 results on Apr 21.

With air-travel demand steadily rebounding, AAL’s passenger revenues are expected to reflect a significant year-over-year increase. The anticipated increase in passenger revenues is likely to have driven the company’s top line in the first quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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