What You Need To Know Ahead of UPS Earnings

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.”  

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. 

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.