What's the outlook for UPS's earnings growth?
4/7/2025 02:10pm
**United Parcel Service (UPS) is expected to show a decline in earnings per share (EPS) but maintain revenue growth.** Here's a detailed analysis:
1. **Earnings Outlook**:
- The consensus estimate for UPS's EPS as of December 31, 2024, is $2.52.
- This represents a year-over-year growth of approximately 3.5%.
- However, analysts have recently revised down their EPS estimates, indicating potential concerns about profitability.
2. **Revenue Outlook**:
- The estimated revenue for the same period is $25.41 billion.
- This reflects a slight decrease of approximately 1.92% compared to the previous year's revenue.
- Full-year revenue projections suggest a decrease of about 2.98% to $88.36 billion, indicating a potential decline in revenue growth.
3. **Market Performance and Analyst Sentiment**:
- Despite a recent decline in stock price, UPS has outpaced the S&P 500's gain in some trading sessions.
- The stock has seen a rise of 1.58% in the past month, leading the Transportation sector's loss.
- Analysts are closely monitoring UPS's performance, with expectations of reporting earnings of $1.50 per share, indicating a 4.9% increase year-over-year.
4. **Full-Year Prospects**:
- For the full year, analysts project earnings of $7.77 per share, representing a modest increase of about 0.65%.
- Revenue is expected to decrease by 2.98% to $88.36 billion compared to the previous year.
- Positive revisions in analyst estimates would signify optimism about the company's business and profitability.
5. **Recent Performance and Trends**:
- UPS's stock has fallen by 6.45% over the past month, underperforming the S&P 500's loss.
- The company's profit margin decreased to 6.3% for the full year 2024, down from 7.4% in 2023.
- Net income decreased by 14% to $5.78 billion, and EPS dropped to $6.76 from $7.81 in 2023.
In conclusion, while UPS is expected to show some growth in revenue and earnings, the overall outlook suggests a decline in earnings per share and a decrease in revenue growth compared to the previous year. The company's performance will be closely watched in its forthcoming earnings report, and any positive changes in analyst estimates could indicate a turnaround in sentiment.