Fighting high fuel costs in the air and on the ground, UPS Inc. (UPS) is still expected to report higher earnings next week when the shipper turns in its third-quarter results.

Analysts expect UPS to earn 86 cents a share, according to a consensus estimate from Thomson First Call. Revenue is forecast at $10.369 billion. Last year, the company earned 70 cents a share, according to First Call.

Against the backdrop of high fuel prices, competition is not relenting on any front. When rival FedEx Corp. (FDX) reported its first-quarter results in late September, the company raised its outlook for the fiscal year even though fuel remains volatile.

"The pricing environment remains very competitive which compounded by rising fuel prices may have limited upside to earnings in the quarter," wrote Morgan Keegan analysts in an Oct. 13 note.

Legg Mason Capital Markets analysts wrote in an Oct. 7 research note that it expects that overseas business and the company's supply-chain business will help counter the domestic package business. As well, UPS is ramping up its flights to China.

In the prior quarter, UPS' international package revenue grew at a 23% pace vs. 5.7% for domestic package revenue.

Hot spots remain the company's pilots union, which has strike authorization, the Legg Mason analysts wrote.

Another front worth watching will be any new comment on a Die Welt report last month that the company is considering acquiring European postal delivery companies.

So far this year, UPS stock is down almost 20%.