We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
UPS (UPS) Down 6.7% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for United Parcel Service (UPS - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UPS due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at UPS in Q1
United Parcel Service's earnings (excluding 2 cents from non-recurring items) of $3.05 per share, beating the Zacks Consensus Estimate of $2.87. The bottom line jumped 10.11% year over year with strong performances across all segments. Quarterly revenues of $24,378 million also outperformed the Zacks Consensus Estimate of $23,896 million. The top line increased 6.42% year over year, driven by favorable pricing and upbeat e-commerce demand.
Overall adjusted operating profit rose 12.1% year over year to $3,306 million in the first quarter, boosted by growth in the adjusted operating profit across all segments. In first-quarter 2022, UPS generated free cash flow of $3,915 million, compared with $3,712 million in first-quarter 2021. UPS’ capital expenditures were $548 million at the end of the same period.
Moreover, UPS’ board of directors decided to double its current-year share buyback target to $2 billion.
Segmental Details for Q1
U.S. Domestic Package revenues increased 8% year over year to $15,124 million. Segmental operating profit (adjusted) climbed 16.5% year over year to $1,705 million in the quarter. Revenue per piece increased 9.5%. Adjusted operating margin in the March quarter was 11.3%.
Revenues at the International Package division summed $4,876 million, up 5.8% year over year. Revenue per piece increased 10.5% year over year. The segment’s performance was driven by strong growth in all regions. Segmental operating profit (adjusted) totaled $1,120 million in the reported quarter, up 2.7% year over year. Adjusted operating margin was 23%.
Supply-Chain Solutions revenues inched up 2% to $4,378 million, aided primarily by the upbeat performance of the Forwarding business. Operating profit (on an adjusted basis) rose 21.8% to $481 million in the March quarter.
2022 Outlook Intact
UPS still expects consolidated revenues of about $102 billion, an adjusted operating margin of approximately 13.7% and an adjusted return on invested capital to be above 30%. UPS reiterates capital expenditures at 5.4% of revenues (approximately $5.5 billion). Dividends are retained $5.2 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, UPS has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, UPS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
UPS (UPS) Down 6.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for United Parcel Service (UPS - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UPS due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at UPS in Q1
United Parcel Service's earnings (excluding 2 cents from non-recurring items) of $3.05 per share, beating the Zacks Consensus Estimate of $2.87. The bottom line jumped 10.11% year over year with strong performances across all segments. Quarterly revenues of $24,378 million also outperformed the Zacks Consensus Estimate of $23,896 million. The top line increased 6.42% year over year, driven by favorable pricing and upbeat e-commerce demand.
Overall adjusted operating profit rose 12.1% year over year to $3,306 million in the first quarter, boosted by growth in the adjusted operating profit across all segments. In first-quarter 2022, UPS generated free cash flow of $3,915 million, compared with $3,712 million in first-quarter 2021. UPS’ capital expenditures were $548 million at the end of the same period.
Moreover, UPS’ board of directors decided to double its current-year share buyback target to $2 billion.
Segmental Details for Q1
U.S. Domestic Package revenues increased 8% year over year to $15,124 million. Segmental operating profit (adjusted) climbed 16.5% year over year to $1,705 million in the quarter. Revenue per piece increased 9.5%. Adjusted operating margin in the March quarter was 11.3%.
Revenues at the International Package division summed $4,876 million, up 5.8% year over year. Revenue per piece increased 10.5% year over year. The segment’s performance was driven by strong growth in all regions. Segmental operating profit (adjusted) totaled $1,120 million in the reported quarter, up 2.7% year over year. Adjusted operating margin was 23%.
Supply-Chain Solutions revenues inched up 2% to $4,378 million, aided primarily by the upbeat performance of the Forwarding business. Operating profit (on an adjusted basis) rose 21.8% to $481 million in the March quarter.
2022 Outlook Intact
UPS still expects consolidated revenues of about $102 billion, an adjusted operating margin of approximately 13.7% and an adjusted return on invested capital to be above 30%. UPS reiterates capital expenditures at 5.4% of revenues (approximately $5.5 billion). Dividends are retained $5.2 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, UPS has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, UPS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.