Shares of United Parcel Service Inc. fell. Monday as investors braced for the parcel delivery giant's quarterly results, which have not been kind to investors in the recent past.
The company is scheduled to unveil its fourth-quarter earnings report on Tuesday at approximately 6 a.m. ET. UPS stock fell on the day each of its past three reports were released by an average of 5.6%, and was down on the day of six of its past seven reports.
UPS UPS stock,
It fell 0.8% on Monday. They're up 14% over the past three months, while shares of FedEx Corp. FDX competition,
The S&P 500 rose 4.7% and the SPX rose 18.3%.
Profit hasn't been the issue, as UPS has topped expectations for EPS for the past 14 consecutive quarters.
However, revenues have fallen short of expectations over the past five quarters. The company has cut its full-year revenue guidance in each of the past three quarters, and provided below-expectations in the quarter before that. (See below for Wall Street's current forecast for the fourth quarter.)
is reading: UPS stock fell to its lowest level in more than 3 years after revenue beat expectations again.
There is reason to be concerned that another misstep or forecast cut could occur, according to Evercore ISI analyst Jonathan Chappell. Based on his analysis of trends, Chappell said: “There may be more downside to UPS' domestic revenues in the U.S. Additionally, the slowdown in China exports represents a headwind to UPS's international revenues.
There have also been business-related headwinds recently that may have allowed UPS's competitors to benefit at its expense. When Brie Carrere, FedEx's chief customer officer, was asked in December whether the company could maintain the market share it gained while UPS was going through tense labor negotiations, Carrere responded, “confidently yes,” according to an AlphaSense transcript.
Read also: UPS blames 'late and noisy' Teamsters talks for lost revenue and lowered expectations.
Labor issues made the fourth quarter difficult for UPS, as the company had to figure out how to cover the cost of a new contract with the Teamsters union without pushing shippers to other delivery companies, said Helen Baker, an analyst at TD Cowen.
Baker reiterated her market performance rating for UPS stock, keeping her price target at $175.
Here are the current average analyst estimates for UPS compiled by FactSet for some key financial metrics, and what they stood at the end of the third quarter.
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The FactSet consensus for EPS was $2.46, down from $3.62 in the same period last year. Consensus EPS has fallen significantly since the end of Q3, when it was $3.03.
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The FactSet revenue consensus was $25.398 billion, down from $27.033 billion a year ago, and below the consensus of $26.247 billion as of September 29.
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Revenues from the US domestic package are expected to reach $17.39 billion. This compares to the consensus of $17.82 billion as of September 29, and the $18.25 billion reported a year ago.
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International revenues are expected to decline to $4.64 billion, from $4.95 billion last year. At the end of September, the consensus was $4.70 billion.
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The FactSet consensus for 2024 revenue fell to $95.51 billion, from $98.00 billion as of September 29.
