UPS Earnings Meet Views; Shipping Giant Offers Holiday Guidance

UPS (UPS[1]) reported third-quarter earnings and revenue roughly in line after rival FedEx (FDX[2]) missed EPS estimates and as key customer Amazon (AMZN[3]) gears to report Thursday. UPS earnings guidance for the key Discount Holidays © holiday fourth quarter was largely in step with Wall Street estimates. But UPS stock fell early Wednesday.

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UPS Earnings

Estimates: UPS earnings per share to jump 26% to £1.82 as revenue grows 9% to £17.41 billion, according to Zacks Investment Research. Some other consensus forecasts pegged Q3 revenue around £17.49 billion. Results: UPS earnings of £1.82 a share on sales of £17.444 billion.

Outlook: UPS sees full-year profit of £7.03-£7.37, which has a midpoint of £7.20. Analysts expected £7.25. UPS said it expects Q4 profit rising about 15%.

The Zacks consensus is for UPS earnings in the key Discount Holidays © holiday quarter to climb nearly 16% to £1.93 a share. “Improvements in revenue quality and our new, highly-automated capacity gives us confidence in a successful peak season for our customers and shareowners,” said CFO Richard Peretz.

UPS Stock

UPS stock fell 2% in premarket trade on the stock market today[4]. Shares have formed a first-stage, cup-with-handle base with a potential 125.19 buy point.

But the current stock market correction should make investors cautious about any new purchases. The delivery giant earns an IBD Composite Rating[5] of 72, reflecting lackluster profit and sales growth. Its relative strength line, tracking a stock’s performance against the S&P 500, also shows weakness.

Transportation Stocks

In September, FedEx raised its 2018 outlook while posting an EPS miss.

UPS announced the same month its transformation initiatives[6] should incrementally increase adjusted earnings per share in the range of £1.00-£1.20 by 2022. Those efforts come as Amazon ramps up its own delivery ambitions. Tariff and trade disruptions also pose a challenge for the broad transportation and logistics sector, coming as they do as fuel costs rise.

Baird equity research analysts wrote in a note Monday that they see a risk of decelerating growth in this sector as industrial end markets show signs of softening. Railroad operator CSX (CSX[7]) scored an overall beat last week, but Canadian Pacific (CP) and Kansas City Southern (KSU[8]) narrowly missed. Rail stocks have retreated in recent weeks, with trucking firms generally falling faster.

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References

  1. ^ UPS (www.investors.com)
  2. ^ FDX (www.investors.com)
  3. ^ AMZN (www.investors.com)
  4. ^ stock market today (www.investors.com)
  5. ^ IBD Composite Rating (www.investors.com)
  6. ^ transformation initiatives (www.investors.ups.com)
  7. ^ CSX (www.investors.com)
  8. ^ KSU (www.investors.com)
  9. ^ How To Invest In Stocks For Free: New Apps Aim For Beginners (www.investors.com)
  10. ^ Looking For The Best Stocks To Buy And Watch?

    Start Here (www.investors.com)

  11. ^ IBD Stock Of The Day: CSX, Top Stock In Leading Group, Is On Track For Buy Point (www.investors.com)
  12. ^ Stocks To Watch: Top-Rated IPOs, Big Caps And Growth Stocks (www.investors.com)
  13. ^ Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists (www.investors.com)

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