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Key Takeaways
- UPS is slated to report third-quarter earnings before the market opens Thursday.
- The shipping giant is expected to post year-over-year revenue and net income growth.
- Investors will be watching for updates on shipping volume and potential adjustments to the company’s full-year outlook.
United Parcel Service (UPS) will report third-quarter earnings before the market opens Thursday, and analysts are expecting year-over-year growth on the top and bottom lines.
The global shipping giant is expected to produce revenue of $21.96 billion, up 4% from $21.06 billion a year ago. Net income is projected at $1.36 billion, or $1.59 per share, up from $1.13 billion and $1.31 per share.
| Â | Analysts’ Estimates for Q3 2024 | Â Q2 2024 | Â Q3 2023 |
| Revenue | Â $21.96 billion | Â $21.82 billion | Â $21.06 billion |
| Earnings Per Share | Â $1.59 | Â $1.65 | Â $1.31 |
| Net Income |  $1.36 billion |  $1.41 billion |  $1.13 billion |
Key Metric: Shipping Volume
Three months ago, UPS reported growing shipping volume for the first time in nine quarters. Chief Executive Officer (CEO) Carol Tomé said the second quarter was “a significant turning point,” and that “going forward we expect to return to operating profit growth.”
However, analysts at Barclays said Monday that UPS is facing a “still lackluster freight environment compounded by long-term challenges from the potential loss of Amazon volumes, a more efficient FedEx competitor and growth in lower margin ecommerce.” Â
Barclays downgraded UPS to “underweight” from “equal weight,” leaving its price target unchanged at $120. Shares of UPS, which were little changed Tuesday afternoon at $131.55, have fallen more than 16% in 2024.Â
Business Spotlight: 2024 Outlook
UPS last quarter narrowed its full-year revenue projection to roughly $93 billion from a previously projected range of $92 billion to $94.5 billion, and said it was “targeting around $500 million in share repurchases.” Barclays analysts called the company’s guidance “rather aggressive.”
The company should see added revenue in the fourth quarter stemming from a deal announced in April to become the primary air cargo provider of the United States Postal Service (USPS), replacing rival FedEx (FDX), whose contract expired on Sept. 29.
However, even if revenue grows, integrating the USPS contact “likely represents a near-term headwind given startup costs required to launch a material daytime airline operation to support the business,” Barclays said.