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) Up 9.5% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for United Parcel Service (UPS - Free Report) . Shares have added about 9.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UPS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at UPS in Q3
UPS' earnings (excluding 4 cents from non-recurring items) per share of $2.28 surpassed the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. Results were aided by expanded residential delivery volumes amid the coronavirus pandemic, which confined people to their homes, and strong outbound demand from Asia.
UPS generated revenues worth $21,238 million in the quarter, outpacing the Zacks Consensus Estimate of $20,079.6 million. Moreover, the top line improved 15.9% on a year-over-year basis, driven by growth across all segments. Results were aided by 13.5% growth in consolidated average daily volumes. Also, operating profit climbed 9.9% on an adjusted basis in the third quarter owing to a robust rise in International Package segment’s adjusted operating profit.
UPS did not provide consolidated revenue and earnings per share guidance due to the uncertainty revolving around the timing and pace of the economic recovery.
Segmental Details
U.S. Domestic Package revenues increased 15.5% year over year to $13,225 million in the third quarter, driven by a 13.8% rise in average daily volumes on the back of elevated residential demand. Segmental operating profit (adjusted) decreased 8.8% to $1,133 million in the quarter. Adjusted operating margin in the September quarter was 8.6%.
Revenues at the International Package division summed $4,087 million, up 17%. Average daily volumes rose 12.1%. Segmental results were aided by the double-digit export volume expansion across the globe and strong outbound demand from Asia. Segmental operating profit (adjusted) totaled $972 million in the reported quarter, up 40.3%.
Supply Chain and Freight revenues climbed 16.5% to $3,926 million owing to higher demand for air freight forwarding from Asia. Operating profits (on an adjusted basis) increased 18% to $302 million in the September quarter.
Other Details
Cash from operations were $9.3 billion at the end of the first nine months of 2020. UPS also generated free cash flow of $5.9 billion on an adjusted basis in the same period. The company’s capital expenditures (adjusted) were $3,355 million at the end of the first nine months of 2020.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 11.31% due to these changes.
VGM Scores
At this time, UPS has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise UPS has a Zacks Rank #2 (Buy). We expect an above average 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) Up 9.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for United Parcel Service (UPS - Free Report) . Shares have added about 9.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is UPS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at UPS in Q3
UPS' earnings (excluding 4 cents from non-recurring items) per share of $2.28 surpassed the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. Results were aided by expanded residential delivery volumes amid the coronavirus pandemic, which confined people to their homes, and strong outbound demand from Asia.
UPS generated revenues worth $21,238 million in the quarter, outpacing the Zacks Consensus Estimate of $20,079.6 million. Moreover, the top line improved 15.9% on a year-over-year basis, driven by growth across all segments. Results were aided by 13.5% growth in consolidated average daily volumes. Also, operating profit climbed 9.9% on an adjusted basis in the third quarter owing to a robust rise in International Package segment’s adjusted operating profit.
UPS did not provide consolidated revenue and earnings per share guidance due to the uncertainty revolving around the timing and pace of the economic recovery.
Segmental Details
U.S. Domestic Package revenues increased 15.5% year over year to $13,225 million in the third quarter, driven by a 13.8% rise in average daily volumes on the back of elevated residential demand. Segmental operating profit (adjusted) decreased 8.8% to $1,133 million in the quarter. Adjusted operating margin in the September quarter was 8.6%.
Revenues at the International Package division summed $4,087 million, up 17%. Average daily volumes rose 12.1%. Segmental results were aided by the double-digit export volume expansion across the globe and strong outbound demand from Asia. Segmental operating profit (adjusted) totaled $972 million in the reported quarter, up 40.3%.
Supply Chain and Freight revenues climbed 16.5% to $3,926 million owing to higher demand for air freight forwarding from Asia. Operating profits (on an adjusted basis) increased 18% to $302 million in the September quarter.
Other Details
Cash from operations were $9.3 billion at the end of the first nine months of 2020. UPS also generated free cash flow of $5.9 billion on an adjusted basis in the same period. The company’s capital expenditures (adjusted) were $3,355 million at the end of the first nine months of 2020.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 11.31% due to these changes.
VGM Scores
At this time, UPS has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise UPS has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.