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Why Is United Parcel (UPS) Down 2.7% Since the Last Earnings Report?
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It has been about a month since the last earnings report for United Parcel Service, Inc. (UPS - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
United Parcel Beats Q1 Earnings, Revenue Estimates
United Parcel reported first-quarter 2017 earnings of $1.32, beating the Zacks Consensus Estimate of $1.30 per share. Earnings increased 3.9% on a year-over-year basis. Results were aided by the substantial increase in operating profit of the Supply Chain and Freight unit. Revenues improved 6.2% to $15,315 million from the year-ago quarter, beating the Zacks Consensus Estimate of $15,179.5 million.
Segmental Details
U.S. Domestic Package revenues climbed 5% year over year to $9,535 million in the reported quarter. But segmental operating profit declined to $1,076 million.
Segmental average daily package volumes climbed 2.6% driven by a 2.3% rise in Ground products and 3.9% growth in Next Day Air services. Deferred Air products were up 4.1%. Average revenue per piece was up 2.4%.
International Package revenues improved 4.9% to $3,058 million despite the adverse impact of foreign currency. Export shipments improved 14% in the first quarter. However, segmental operating profits declined to $529 million in the quarter. The measure came in at $648 million on a currency neutral basis. Revenue per piece grew 1.1%.
Supply Chain and Freight revenues increased 12.5% to $2,722 million. Segmental results were aided by the acquisition of Coyote Logistics, which was completed in the third quarter of 2015. Operating profits in the segment climbed 22% to $179 million in the reported quarter.
United Parcel generated free cash flow of $693 million and spent $938 million as capital expenditure in the reported quarter.
Outlook
United Parcel still expects 2017 adjusted earnings per share in the band of $5.80 to $6.10
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
At this time, United Parcel's stock has a nice Growth Score of 'B', while it is lagging a lot on the momentum front with 'D'. Charting a somewhat similar path, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is United Parcel (UPS) Down 2.7% Since the Last Earnings Report?
It has been about a month since the last earnings report for United Parcel Service, Inc. (UPS - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
United Parcel Beats Q1 Earnings, Revenue Estimates
United Parcel reported first-quarter 2017 earnings of $1.32, beating the Zacks Consensus Estimate of $1.30 per share. Earnings increased 3.9% on a year-over-year basis. Results were aided by the substantial increase in operating profit of the Supply Chain and Freight unit. Revenues improved 6.2% to $15,315 million from the year-ago quarter, beating the Zacks Consensus Estimate of $15,179.5 million.
Segmental Details
U.S. Domestic Package revenues climbed 5% year over year to $9,535 million in the reported quarter. But segmental operating profit declined to $1,076 million.
Segmental average daily package volumes climbed 2.6% driven by a 2.3% rise in Ground products and 3.9% growth in Next Day Air services. Deferred Air products were up 4.1%. Average revenue per piece was up 2.4%.
International Package revenues improved 4.9% to $3,058 million despite the adverse impact of foreign currency. Export shipments improved 14% in the first quarter. However, segmental operating profits declined to $529 million in the quarter. The measure came in at $648 million on a currency neutral basis. Revenue per piece grew 1.1%.
Supply Chain and Freight revenues increased 12.5% to $2,722 million. Segmental results were aided by the acquisition of Coyote Logistics, which was completed in the third quarter of 2015. Operating profits in the segment climbed 22% to $179 million in the reported quarter.
United Parcel generated free cash flow of $693 million and spent $938 million as capital expenditure in the reported quarter.
Outlook
United Parcel still expects 2017 adjusted earnings per share in the band of $5.80 to $6.10
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter.
United Parcel Service, Inc. Price and Consensus
United Parcel Service, Inc. Price and Consensus | United Parcel Service, Inc. Quote
VGM Scores
At this time, United Parcel's stock has a nice Growth Score of 'B', while it is lagging a lot on the momentum front with 'D'. Charting a somewhat similar path, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.