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UPS Gears Up for Q2 Earnings: What's in the Offing?

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

The Zacks Consensus Estimate for UPS’ second-quarter earnings has been revised 0.3% upward in the past 30 days to $3.15. UPS has an impressive surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 10.1%.

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

Akin to the last few quarters, elevated demand for e-commerce-related package deliveries should aid the second-quarter 2022 results.

Strong package delivery demand is expected to have aided UPS’ second-quarter 2022 performance. Higher revenues 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 3.6% increase from the second-quarter 2021 reported number.

UPS’ International Package revenues are expected to have been boosted by strong growth in all regions. The consensus mark for second-quarter International Package revenues suggests a 4.3% rise from the year-ago period’s reported number.

High fuel costs are likely to have dented UPS’ bottom-line performance in the to-be-reported quarter. Moreover, supply-chain challenges are likely to have hurt operations.

What Our Model Says

Our proven 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 odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

UPS has an Earnings ESP of +3.94% and a Zacks Rank #3.

Highlights of Q1

UPS’ earnings (excluding 2 cents from non-recurring items) of $3.05 per share beat the Zacks Consensus Estimate of $2.87. The bottom line increased 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 improved 6.42% year over year, driven by favorable pricing and upbeat e-commerce demand.

Other Stocks to Consider

Here are a few other stocks worth considering from the broader Zacks Transportation sector, as our model shows that these too have the right combination of elements to beat on second-quarter 2022 earnings:

C.H. Robinson Worldwide (CHRW - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank of 2. CHRW will release results on Jul 27. You can see the complete list of today’s Zacks #1 Rank stocks here.

C.H. Robinson has an expected earnings growth rate of 16.6% for the current year. CHRW delivered a trailing four-quarter earnings surprise of 17.1%, on average.

C.H. Robinson has a long-term earnings growth rate of 9%. Shares of CHRW have gained 8.8% over the past year.

Kirby (KEX - Free Report) has an Earnings ESP of +0.70% and a Zacks Rank #2. KEX will release results on Jul 28.

Kirby has an expected earnings growth rate of 282.14% for the current year. KEX delivered a trailing four-quarter earnings surprise of 7.7%, on average.

KEX has a long-term earnings growth rate of 12%. 

Southwest Airlines (LUV - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank #3. Improved air-travel demand is likely to aid LUV’s results. LUV will release results on Jul 28.

Southwest has an expected earnings growth rate of 226.05% for the current year. LUV delivered a trailing four-quarter earnings surprise of 33.5%, on average.

Southwest has a long-term earnings growth rate of 6%.

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