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UPS Beats Earnings, Revenue Estimates in Q3

United Parcel Service, Inc. UPS reported third-quarter 2017 earnings of $1.45, beating the Zacks Consensus Estimate of $1.44 per share. Earnings increased 0.7% on a year-over-year basis. Results, however, were hurt by the recent hurricanes.

Revenues improved 7% to $15,978 million from the year-ago quarter, beating the Zacks Consensus Estimate of $15,605.5 million. The upside was driven by growth across all the key segments of the company.

Segmental Details

U.S. Domestic Package revenues climbed 3.9% year over year to $9,649 million in the reported quarter, driven by e-commerce growth. Segmental operating profit decreased 5.6% to $1,182 million.

Segmental average daily package volumes increased 3.4%, driven by a 3.4% rise in Ground products and 8% growth in Next Day Air services. Deferred Air products were down 1.6%. Average revenue per piece for the segment was up 2%. 

International Package revenues improved 11.2% to $3,364 million. Daily export volumes rose 19% in the quarter on the back of growth in all regions. Segmental operating profit increased 8.9% to $627 million.

Supply Chain and Freight revenues increased 13.4% to $2,965 million. Segmental results were aided by better market conditions among other factors. Operating profits in the segment climbed 9.7% to $226 million in the reported quarter.

United Parcel Service, Inc. Price, Consensus and EPS Surprise

 

United Parcel Service, Inc. Price, Consensus and EPS Surprise | United Parcel Service, Inc. Quote

 

Other Details

UPS has spent $3.7 billion as capital expenditure in the first nine months of the year. Moreover, the company paid approximately $2.1 as dividend to shareholders in the first nine months of 2017. It also bought back 12.3 million shares for more than $1.4 billion.

In fact, the company’s efforts to reward shareholders consistently through buybacks and dividend payouts are impressive.

Outlook

UPS carries a Zacks Rank #3 (Hold). The company now expects 2017 adjusted earnings per share between $5.85 and $6.10 (old guidance: $5.80 to $6.10). The guidance includes $400 million of pre-tax currency headwinds. The Zacks Consensus Estimate for 2017 currently stands at $6 per share. The company intends to raise some rates by an average of 4.9% from Dec. 24.

You can see https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICI... _1link">the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly waiting for third-quarter earnings reports from key players like GOL Linhas GOL, Copa Holdings, S.A. CPA and Expeditors International of Washington EXPD. While GOL Linhas and Copa Holdings will report third-quarter results on Nov 8, Expeditors will report the same on Nov 7.

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Gol Linhas Aereas Inteligentes S.A. (GOL): Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA): Free Stock Analysis Report
 
Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report
 
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
 
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