Back to top

Image: Bigstock

UPS Set to Report Q2 Earnings: Here's What You Should Know

Read MoreHide Full Article

United Parcel Service, Inc. (UPS - Free Report) is scheduled to report second-quarter 2023 results on Aug 8 before market open.

The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 2.9%.

Let’s see how things are likely to have shaped up for the company this earnings season.

Q2 Expectations

For second-quarter 2023 revenues, both the Zacks Consensus Estimate and our estimate are pegged at $22.8 billion, indicating year-over-year declines of 5.9% and 7.7%, respectively.

The consensus estimate for U.S. Domestic Package revenues of $14,746 million suggests a 4.2% fall from the year-ago reported figure.

The consensus estimate for International Package revenues of $4,759 million implies a 6.2% dip from the prior-year reported figure. Reduction in average daily volume is expected to have weighed on segmental revenues.

The Zacks Consensus Estimate for Supply Chain Solutions  revenues is pegged at $3,492 million, indicating a 17.5% plunge from the year-earlier reported figure. The downfall is anticipated to have resulted from volume and market rate declines in air and ocean freight forwarding.

Further, high fuel costs are likely to have dented UPS’ bottom-line performance in the to-be-reported quarter. Rising capital expenditure also adds to its woes. Moreover, a decline in shipping volumes due to weakening demand is expected to have been concerning. Notably, the Zacks Consensus Estimate for second-quarter 2023 earnings of $2.51 per share suggests a decrease of 23.7% on a year-over-year basis.

What Our Model Says

Our proven model does not predict 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, which is absolutely not the case here. 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 -0.96% and a Zacks Rank #3.

Highlights of Q1

The company’s first-quarter 2023 earnings of $2.20 per share beat the Zacks Consensus Estimate by a penny but declined 27.9% year over year. Revenues of $22,925 million fell short of the Zacks Consensus Estimate of $22,935.2 million and decreased 5.9% year over year.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this time around.

Air Transport Services Group, Inc. (ATSG - Free Report) currently has an Earnings ESP of +1.37% and a Zacks Rank #3. It will release second-quarter 2023 results on Aug 3.

We are impressed by ATSG's efforts to reward shareholders through buybacks. In November 2022, ATSG’s board of directors approved a new share repurchase authorization of $150 million shares, offsetting its previously exhausted share buybacks.

Copa Holdings, S.A. (CPA - Free Report) has an Earnings ESP of +0.82% and a Zacks Rank #2. CPA is slated to release results on Aug 9. You can see the complete list of today’s Zacks #1 Rank stocks here.

Copa Holdings has an expected earnings growth rate of more than 100% for second-quarter 2023. CPA delivered a trailing four-quarter earnings surprise of 14.60%, on average. The Zacks Consensus Estimate for second-quarter 2023 earnings has been revised upward by 94% in the past 90 days.

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

Published in