UPS Earnings: What to Watch

By Paul Ziobro

United Parcel Service Inc. is scheduled to release its first-quarter results before the market opens Thursday. Here is what you need to know.

EARNINGS FORECAST: Analysts polled by Thomson Reuters expected UPS to earn $1.54 a share, compared with $1.32 a year ago. The company's outlook for the year is for earnings between $7.03 and $7.37 a share.

REVENUE FORECAST: Revenue of $16.46 billion is forecast by analysts, compared with $15.31 billion a year ago.

WHAT TO WATCH:

VOLUME AND PRICING: UPS volumes continue to rise as the company handles more of the world's online orders, and the quarterly results will offer a proxy for how online shopping is progressing during a period of economic strength. As always, investors will also look to see whether UPS is raising prices fast enough to offset the higher costs associated with home deliveries.

NETWORK EXPANSION: UPS is ramping up spending to upgrade its delivery network, with $7 billion set aside this year for expansion projects, jumbo jets and more. Expect the company to offer an update as to the timing and specifics of some of the investments, which are intended to add capacity and speed up processing.

CONTRACT NEGOTIATIONS: UPS is currently negotiating with the Teamsters union ahead of a labor contract expiration on July 31. The two sides have been working through some of the Teamsters initial proposals but haven't come to terms on economic topics like wages, pensions and health care.

POSTAL SERVICE: President Donald Trump attacked the U.S. Postal Service in recent weeks with a volley of tweets criticizing its shipping contract with Amazon.com. The president has created a task force to review the agency's finances and pricing structure for its parcel business. UPS could benefit from higher parcel rates at the Postal Service, analysts say, as it would give leeway to UPS and FedEx Corp. to up their own shipping rates.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

April 25, 2018 05:44 ET (09:44 GMT)

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