Pricing, Holiday Plans, Labor in Focus When UPS Reports -- Earnings Preview

By Paul Ziobro Features Dow Jones Newswires

United Parcel Service Inc. is scheduled to report its third-quarter earnings before the market opens Thursday. Here is what you need to know:

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EARNINGS FORECAST: Analysts polled by Thomson Reuters expect UPS to earn $1.45 a share, compared with $1.44 a year earlier, in line with a forecast the logistics and package-delivery company issued in July. For the full year, UPS expects adjusted earnings of $5.80 to $6.10 a share.

REVENUE FORECAST: Revenue of $15.62 billion is expected, up from $14.93 billion a year ago.

WHAT TO WATCH:

PEAK PREP: UPS executives will likely lay out their views for the holiday season and how they plan to handle the surge in packages flowing through the system. UPS has spent billions on upgrading and opening new facilities, adding larger jets and hiring seasonal workers. It also plans to slap on surcharges for packages shipped during the busiest weeks and to penalize shippers for missing volume forecasts.

FREIGHT: While UPS's shipments to consumers and homes get a lot of attention, its other businesses could benefit from trends Citi analysts recently noted, including growing air-cargo volumes and strong domestic freight shipments.

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PRICE HIKE: Investors will look to see how aggressive UPS will be when it comes to raising prices next year. FedEx said in September it planned a 4.9% average price increase for 2018, while the U.S. Postal Service in October proposed raising rates 3.9% on its parcel business. UPS is likely to follow.

UNION TALKS: UPS recently kicked off talks with its largest union, the International Brotherhood of Teamsters, to address the current contract that expires in July. Much has changed since it was signed in 2013, including the leaps e-commerce has made, which will have to be addressed in the new agreement.

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

(END) Dow Jones Newswires

October 25, 2017 07:44 ET (11:44 GMT)