Corporate Earnings - The third-quarter corporate earnings season is underway, with major companies like Visa, UnitedHealth Group, Booking, UPS, and PayPal set to report [1] - S&P 500 companies are expected to see an average earnings increase of +7.2% for Q3 compared to the previous year, marking the smallest rise in two years [1] Federal Reserve Meeting - The Federal Reserve is expected to announce a 25 basis point rate cut, bringing the Fed funds rate to a range of 3.75% to 4.00%, the lowest since late 2022 [2] - Investors are keenly awaiting Chair Jerome Powell's press conference for insights on future interest rate movements [2] Stock Market Performance - Wall Street's main stock indexes closed at record highs, with notable gains from Tesla (+4%) and Nvidia (+2%) [3] - Qualcomm surged over +11% after launching new chips for the AI data center market, while Avidity Biosciences soared more than +42% following an acquisition by Novartis valued at approximately $12 billion [3] Economic Data - The U.S. Conference Board's Consumer Confidence Index is expected to decline to 93.4 in October from 94.2 in September [6] - The Richmond Fed Manufacturing Index is forecasted to improve to -11 in October from -17 previously [7] Bond Market - The yield on the benchmark 10-year U.S. Treasury note is currently at 3.973%, down -0.58% [8] International Markets - The Euro Stoxx 50 Index is down -0.18% as investors react to corporate earnings reports, with German consumer sentiment expected to weaken [9] - Asian stock markets, including China's Shanghai Composite Index and Japan's Nikkei 225, closed lower amid profit-taking and geopolitical concerns [10][11][12] Pre-Market Movers - UPS rose over +9% in pre-market trading after reporting stronger-than-expected Q3 results and issuing above-consensus Q4 revenue guidance [13] - UnitedHealth Group increased more than +4% following better-than-expected Q3 results and an upward revision of its full-year adjusted EPS guidance [13]

Financial Performance - UPS's third-quarter profit topped Wall Street's estimates [1] Strategic Initiatives - The courier's plan to reshape its delivery network starts to show results [1]

Revenue Performance - Total revenue for Q3 2025 was $21,415 million, a decrease of $830 million or 3.7% compared to Q3 2024[2] - U.S. Domestic Package revenue decreased by $377 million or 2.6% to $14,220 million, while International Package revenue increased by $262 million or 5.9% to $4,673 million[2] - Total revenue for the nine months ended September 30, 2025, was $64,182 million, a decrease of $1,587 million or 2.4% compared to $65,769 million in 2024[9] - U.S. Domestic Package revenue decreased by $301 million or 0.7% to $42,763 million, while International Package revenue increased by $494 million or 3.8% to $13,531 million[12] - Supply Chain Solutions revenue fell by $715 million or 22.1% to $2,522 million, primarily due to a significant drop in Forwarding revenue[2] - Supply Chain Solutions revenue fell by $1,780 million or 18.4% to $7,888 million, primarily due to a significant drop in Forwarding revenue[12] Profitability Metrics - Operating profit for Q3 2025 was $1,804 million, down $181 million or 9.1% from $1,985 million in Q3 2024[2] - Net income for Q3 2025 was $1,311 million, a decline of $228 million or 14.8% compared to $1,539 million in Q3 2024[2] - Operating profit for the total company was $5,292 million, down $250 million or 4.5% from $5,542 million in the previous year[9] - Net income for the nine months ended September 30, 2025, was $3,781 million, a decline of $280 million or 6.9% compared to $4,061 million in 2024[9] - Basic earnings per share decreased to $4.46, down $0.28 or 5.9% from $4.74 in the prior year[9] - Non-GAAP adjusted operating profit for Q3 2025 was $2.132 billion, with a non-GAAP adjusted operating margin of 10.0%, compared to 8.9% in Q3 2024[22] - Non-GAAP Adjusted Operating Profit for the nine months ended September 30, 2025, was $5,771 million, with an operating margin of 9.0%[38] Operating Expenses - Total operating expenses for Q3 2025 were $19,611 million, down $649 million or 3.2% from $20,260 million in Q3 2024[2] - Total operating expenses were $58,890 million, a reduction of $1,337 million or 2.2% from $60,227 million in 2024[14] - U.S. Domestic Package Operating Expenses decreased by 1.0% to $13,617 million, with an operating profit of $603 million, down 28.5% year-over-year[33] - International Package Operating Expenses increased by 10.6% to $3,997 million, with an operating profit of $676 million, down 15.3% year-over-year[33] - Supply Chain Solutions Operating Expenses decreased significantly by 31.0% to $1,997 million, with an operating profit of $525 million, up 52.6% year-over-year[33] Volume and Pricing - Average Daily Package Volume decreased by 2,108 thousand or 9.8% to 19,419 thousand in Q3 2025 compared to Q3 2024[5] - Average Daily Package Volume decreased by 1,246 thousand packages or 5.9% to 19,974 thousand packages[12] - The average revenue per piece for U.S. Domestic Package increased by 9.8% to $13.47 in Q3 2025 from $12.27 in Q3 2024[5] - The average revenue per piece for U.S. Domestic Package increased by 6.5% to $13.18, reflecting improved pricing strategies[12] - U.S. Domestic Package Cost Per Piece (GAAP) increased by 12.3% to $12.92, while Non-GAAP Adjusted Cost Per Piece increased by 10.4% to $12.63[35] - U.S. Domestic Package Cost Per Piece (GAAP) rose to $12.43 in 2025, a 7.2% increase from $11.59 in 2024[55] - Non-GAAP Adjusted Cost Per Piece for U.S. Domestic Package was $12.30 in 2025, reflecting a 6.4% increase from $11.56 in 2024[55] Cash Flow and Assets - Free cash flow for the nine months ended September 30, 2025, was $2.744 billion, a decline of 32% from $4.038 billion in the same period of 2024[20] - Cash and cash equivalents increased to $6.764 billion at the end of Q3 2025, up from $6.112 billion at the beginning of the period[18] - Total assets increased to $71.392 billion as of September 30, 2025, compared to $70.070 billion on December 31, 2024, reflecting a growth of 1.9%[16] - Total current liabilities decreased to $14.552 billion as of September 30, 2025, from $16.441 billion at the end of 2024, a reduction of 11.5%[16] Transformation and Strategy Costs - The company incurred total transformation strategy costs of $328 million in Q3 2025, up from $154 million in Q3 2024[22] - Total Transformation Strategy Costs for the nine months ended September 30, 2025, were $460 million, up from $227 million in 2024[38] - Transformation Strategy Costs for U.S. Domestic Package were $400 million in 2025, compared to $93 million in 2024[53] Other Income and Gains - Total other income (expense) was $(197) million, a decline of $122 million or 162.7% compared to $(75) million in Q3 2024[2] - The company reported a total other income (expense) of $(500) million, an increase in expense of $273 million or 120.3% compared to $(227) million in 2024[9] - The company reported a pre-tax gain of $20 million on the divestiture of a business within Supply Chain Solutions[48] - A pre-tax gain of $156 million was recorded from the divestiture of the Coyote Logistics business in 2024[50] - The company recorded a pre-tax one-time payment of $88 million related to an international regulatory matter in 2024[50]

Core Viewpoint - United Parcel Service (UPS) anticipates fourth-quarter revenue to exceed Wall Street's expectations, driven by price increases to counteract weak business-to-business demand in the U.S. [1] Group 1 - UPS is forecasting fourth-quarter revenue above Wall Street estimates [1] - The company is relying on price increases to mitigate soft demand in the business-to-business sector [1] - The focus is on addressing challenges in the U.S. market [1]

Market Overview - U.S. stock futures showed mixed movements following a positive trading session on Monday, where benchmark indices reached new records due to successful trade negotiations with China [1] - The Federal Reserve is expected to announce a decision on interest rates, with a 97.8% likelihood of a cut in the October meeting [2] - Major indices' futures showed slight declines for Dow Jones and S&P 500, while Nasdaq 100 saw a minor increase [2] Company Earnings and Performance - United Parcel Service (UPS) is expected to report earnings of $1.31 per share on revenue of $20.83 billion, with a short-term stronger price trend but weaker medium and long-term trends [5] - UnitedHealth Group (UNH) anticipates earnings of $2.81 per share on revenue of $113.06 billion, showing a strong medium and short-term price trend but weaker long-term performance [5] - Cameco Corp. (CCJ) rose 9.67% and Brookfield Asset Management (BAM) advanced 3.52% after announcing a partnership with the U.S. Government for $80 billion in new nuclear reactors, maintaining a strong price trend [5] - 3D Systems Corp. (DDD) gained 9.45% due to significant milestones in its Saudi joint venture, indicating a strong price trend across all time frames [5] - Waste Management Inc. (WM) shares dropped 2.51% after reporting weaker-than-expected third-quarter results, maintaining a poor growth ranking [6] Sector Performance - Information technology, communication services, and consumer discretionary sectors recorded the biggest gains, contributing to a positive close for most sectors on the S&P 500 [7] - Consumer staples and materials sectors, however, closed lower, bucking the overall market trend [7] Analyst Insights - Professor Jeremy Siegel highlighted robust corporate profits as a key driver for the market, expecting a 25-basis point cut from the Federal Open Market Committee [9] - Siegel noted that earnings are strong and the real economy looks good, despite some tariff-related price noise being temporary [10] - Cautious market sentiment persists, with positioning remaining hedged and skeptical, which Siegel views as a healthy sign for future growth [11]

Market Overview - U.S. stock futures showed mixed movements following a positive trading session on Monday, where benchmark indices reached new records due to successful trade negotiations with China [1] - The Federal Reserve is expected to announce a decision on interest rates, with a 97.8% likelihood of a cut in the October meeting [2] - Major indices' futures showed slight declines for Dow Jones and S&P 500, while Nasdaq 100 saw a minor increase [2] Company Earnings and Performance - United Parcel Service (UPS) is expected to report earnings of $1.31 per share on revenue of $20.83 billion, with a short-term strong price trend but weak medium and long-term trends [5] - UnitedHealth Group (UNH) anticipates earnings of $2.81 per share on revenue of $113.06 billion, showing a strong medium and short-term price trend but weaker long-term performance [5] - Cameco Corp. (CCJ) rose 9.67% and Brookfield Asset Management (BAM) advanced 3.52% after announcing a partnership with the U.S. Government for $80 billion in new nuclear reactors, maintaining a strong price trend [5] - 3D Systems Corp. (DDD) gained 9.45% due to significant milestones in its Saudi joint venture, indicating a strong price trend across all time frames [5] - Waste Management Inc. (WM) shares fell 2.51% after reporting weaker-than-expected third-quarter results, maintaining a poor growth ranking [6] Sector Performance - Information technology, communication services, and consumer discretionary sectors recorded the biggest gains, contributing to a positive close for most sectors on the S&P 500 [7] - Consumer staples and materials sectors, however, closed lower, bucking the overall market trend [7] Analyst Insights - Professor Jeremy Siegel highlighted robust corporate profits as a key driver for the market, expecting a 25-basis point cut from the Federal Open Market Committee [9] - Siegel noted that earnings are strong and the real economy looks good, despite some tariff-related price noise being temporary [10] - Sentiment remains cautious, with positioning still hedged, which Siegel views as a healthy sign for the market's future [11]

The global shipper's sales and earnings are down on lower domestic volumes and higher labor costs. Investors want a turnaround. ...

Group 1 - United Parcel Service, Inc. (UPS) is currently experiencing stock price fluctuations, with potential movement from $87 to $100 in a good quarter and down to $80 in a bad quarter, indicating a decent risk-reward scenario [1] - The company provides a range of logistics services, including express shipping, freight forwarding, customs brokerage, and supply chain solutions [2] - There is a belief that UPS stock is attempting to find a bottom, although there are concerns regarding its large dividend and the need for financial flexibility [2] Group 2 - Comparatively, other companies like FedEx and J.B. Hunt are favored over UPS, suggesting a preference for alternative investments within the transportation sector [2] - The article suggests that certain AI stocks may offer greater upside potential and less downside risk compared to UPS, indicating a shift in investment focus [2]

Core Viewpoint - UPS is facing significant challenges, with its stock down approximately 30% this year, underperforming compared to both the industrial sector and broader market indices [2][10]. Company Performance - UPS's stock has declined about 35.12%, contrasting sharply with the XLI ETF's increase of around 14% and the S&P 500's rise of nearly 17% [2]. - The company is experiencing a difficult situation, particularly in comparison to its sector, with FedEx down only 12.4% [2]. Technical Analysis - The stock is trending downward but has shown some stabilization around lower levels, with a consistent support floor near 82 [3][6]. - Resistance levels are identified around 89, with a downward sloping trend line indicating a continued descent from previous highs [4][8]. - The 21-day exponential moving average is starting to slope upward, suggesting modest improvement, while the stock is trading near the 63-day exponential moving average [5]. Market Sentiment and Volatility - There is elevated applied volatility leading into the upcoming earnings report, indicating a critical juncture for the company [10]. - The loss of half of its Amazon business is a significant headwind, and the company is currently paying a 7.5% dividend yield, which may be at risk if profitability continues to decline [11]. Options Strategy - A bullish call diagonal strategy is proposed, involving buying an 87 strike call option expiring on November 14 and selling a 93 strike call option expiring on October 31, capturing the earnings event [12][13]. - The strategy is designed to profit if the stock moves above the $88 level, with the option market pricing in a potential move of about 7% [14].

Core Insights - UPS shares have declined significantly, losing nearly 33% in the past year and over 60% since early 2022, resulting in a dividend yield of 7.5%, which is substantially higher than the S&P 500's 1.2% and FedEx's 2.4% [1][3] Financial Performance - UPS's second-quarter revenue decreased by nearly 3% to $21.2 billion, with adjusted earnings dropping 13% to $1.55 per share, impacting cash flow [4] - Cash flow from operations was $2.7 billion and free cash flow was $742 million in the first half of the year, both significantly lower than last year's figures of $5.3 billion and nearly $3.4 billion respectively [4] Dividend Sustainability - The company paid $2.7 billion in dividends in the first half of the year, which was $2 billion more than its free cash flow during the same period, leading to increased debt [5] - Long-term debt rose from $19.5 billion to $23.8 billion, indicating reliance on debt to fund dividends, which is not sustainable long-term [5] Strategic Initiatives - UPS has initiated a two-pronged strategy to realign its business, focusing on reducing reliance on Amazon and enhancing higher-margin operations like healthcare logistics [6] - The company aims to achieve $3.5 billion in annual cost savings by the end of the year through various measures, including closing buildings and reducing headcount [6][7]