Fly Intel: What to watch in UPS earnings report

UPS (UPS) is scheduled to report results of its fiscal first quarter before the market open on Thursday, April 25, with a conference call scheduled for 8:30 am ET. What to watch for: 1. GUIDANCE: When UPS reported its fourth quarter results on January 30, 2018, the company provided fiscal 2019 adjusted earnings per share guidance of $7.45-$7.75 against analyst estimates of $7.73, at that time. On March 5, UPS gave updated guidance for Q1 and FY19 in slides presented at the Raymond James Institutional Investors Conference. The company said it sees Q1 adjusted EPS around $1.41, against analyst expectations of $1.41. UPS also affirmed its FY19 adjusted EPS view of $7.45-$7.75. Current FY19 analyst estimates sit at $7.53. UPS also noted that is sees FY19 adjusted free cash flow of $3.5B-$4B, with potential upside from working capital initiatives and sees FY19 operating profits growing in the low teens with all three segments up double digits. 2. FEDEX RESULTS: On March 19, FedEx (FDX) reported Q3 adjusted EPS of $3.03 and revenue of $17B against analyst expectations of $3.11 and $17.67B, respectively. FedEx also reported Q3 adjusted operating margin of 5.8%, flat when compared to last year. Additionally, FedEx cut its FY19 EPS view again to $15.10-$15.90 from $15.50-$16.50, against analyst expectations of $15.97, at that time. 3. BERENBERG UPGRADE OF UPS TO BUY: Berenberg analyst Joel Spungin upgraded UPS to Buy from Hold with a $130 price target. Following an in-depth review of European parcel markets, the analyst said he was increasingly confident that UPS will deliver margin improvement in both its International business and the U.S. this year. Its cash conversion remains strong and free cash flow guidance "looks too conservative," Spungin wrote in a research note. He said UPS has built a strong presence in European business-to-business delivery.