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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 1.35%. The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 2% downward over the past 60 days.
Given this backdrop, let’s delve deeper to unearth the factors likely to have influenced UPS’ performance in the to-be-reported quarter.
United Parcel Service, Inc. Price and EPS Surprise
We expect high labor costs to have hurt UPS’ bottom-line performance in the quarter under review. The labor deal inked with International Brotherhood of Teamsters in August is likely to have resulted in increased labor costs. High fuel costs are likely to affect bottom-line results as well.
Apart from the adverse effects of labor negotiations, weakening demand due to economic slowdown has also led to a decline in the volume of packages shipped. We expect average daily volumes (consolidated) to decrease 7% in fourth-quarter 2023 from fourth-quarter 2022 levels. Revenues are likely to have suffered due to the weak demand scenario.
To combat the lackluster demand scenario and an uptick in labor costs, UPS is looking to cut total expenses through various avenues. Our model predicts total adjusted operating expenses for fourth-quarter 2023 to decline 2.7% from fourth-quarter 2022 actuals.
What Our Model Says
Our proven model conclusively 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, which is exactly 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 +0.46% and a Zacks Rank #3.
Highlights of Q3
UPS' third-quarter 2023 earnings per share of $1.57 beat the Zacks Consensus Estimate of $1.53 but declined 47.5% year over year. Revenues of $21,061 million fell short of the Zacks Consensus Estimate of $21,538.7 million and decreased 12.8% year over year.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these, too, have the right combination of elements to beat on their fourth-quarter 2023 earnings.
American Airlines Group Inc. (AAL - Free Report) has an Earnings ESP of +43.10% and a Zacks Rank #2. AAL will release results on Jan 25.
The Zacks Consensus Estimate for AAL’s fourth-quarter 2023 earnings has been revised upward by more than 100% in the past 90 days. AAL delivered a trailing four-quarter earnings surprise of 23.83%, on average.
The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised upward by 5.1% in the past 90 days. CPA delivered a trailing four-quarter earnings surprise of 16.81%, on average.
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has an Earnings ESP of +0.85% and a Zacks Rank #2. WAB will release results on Feb 14.
WAB has an expected earnings growth rate of 20.77% for fourth-quarter 2023. It delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s fourth-quarter 2023 earnings has improved 3.3% over the past 90 days.
Image: Bigstock
UPS Gears Up to Release Q4 Earnings: What's in the Offing?
United Parcel Service (UPS - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 30 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 1.35%. The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 2% downward over the past 60 days.
Given this backdrop, let’s delve deeper to unearth the factors likely to have influenced UPS’ performance in the to-be-reported quarter.
United Parcel Service, Inc. Price and EPS Surprise
United Parcel Service, Inc. price-eps-surprise | United Parcel Service, Inc. Quote
We expect high labor costs to have hurt UPS’ bottom-line performance in the quarter under review. The labor deal inked with International Brotherhood of Teamsters in August is likely to have resulted in increased labor costs. High fuel costs are likely to affect bottom-line results as well.
Apart from the adverse effects of labor negotiations, weakening demand due to economic slowdown has also led to a decline in the volume of packages shipped. We expect average daily volumes (consolidated) to decrease 7% in fourth-quarter 2023 from fourth-quarter 2022 levels. Revenues are likely to have suffered due to the weak demand scenario.
To combat the lackluster demand scenario and an uptick in labor costs, UPS is looking to cut total expenses through various avenues. Our model predicts total adjusted operating expenses for fourth-quarter 2023 to decline 2.7% from fourth-quarter 2022 actuals.
What Our Model Says
Our proven model conclusively 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, which is exactly 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 +0.46% and a Zacks Rank #3.
Highlights of Q3
UPS' third-quarter 2023 earnings per share of $1.57 beat the Zacks Consensus Estimate of $1.53 but declined 47.5% year over year. Revenues of $21,061 million fell short of the Zacks Consensus Estimate of $21,538.7 million and decreased 12.8% year over year.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these, too, have the right combination of elements to beat on their fourth-quarter 2023 earnings.
American Airlines Group Inc. (AAL - Free Report) has an Earnings ESP of +43.10% and a Zacks Rank #2. AAL will release results on Jan 25.
The Zacks Consensus Estimate for AAL’s fourth-quarter 2023 earnings has been revised upward by more than 100% in the past 90 days. AAL delivered a trailing four-quarter earnings surprise of 23.83%, on average.
Copa Holdings, S.A. (CPA - Free Report) has an Earnings ESP of +1.47% and sports a Zacks Rank #1. CPA will release results on Feb 7. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CPA’s fourth-quarter 2023 earnings has been revised upward by 5.1% in the past 90 days. CPA delivered a trailing four-quarter earnings surprise of 16.81%, on average.
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has an Earnings ESP of +0.85% and a Zacks Rank #2. WAB will release results on Feb 14.
WAB has an expected earnings growth rate of 20.77% for fourth-quarter 2023. It delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s fourth-quarter 2023 earnings has improved 3.3% over the past 90 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.