UPS's stock surges after profit beat by the widest margin in more than four years. ...

Core Insights - United Parcel Service (UPS) exceeded analysts' profit expectations for Q3 and forecasted revenue above Wall Street's estimates for the holiday season, relying on price increases to counteract weak business-to-business demand in the U.S. [1][2] Financial Performance - UPS reported an adjusted profit of $1.74 per share for the three months ending September 30, surpassing the average analyst expectation of $1.30 [4] - The company achieved consolidated revenue of $21.41 billion, exceeding expectations of $20.83 billion [4] Future Outlook - UPS projects fourth-quarter revenue to be approximately $24 billion, while analysts had anticipated an average of $23.8 billion [3] - The company is focusing on rate hikes, cost reductions, and prioritizing high-margin shipments to stabilize its business ahead of the critical holiday season [2] Strategic Adjustments - UPS is reducing the number of packages delivered for its largest customer, Amazon.com, to enhance profit margins [3] - The peak holiday shipping and return season is expected to see daily average volumes double, lasting from November to the end of January [3]

Core Insights - United Parcel Service (UPS) reported lower profit and revenue in its third quarter, but the results exceeded expectations due to volume gains in its international segment, which compensated for declines in its domestic business [1] Financial Performance - The company experienced a decline in both profit and revenue compared to previous periods, yet the performance was better than analysts' forecasts [1] - The international segment showed volume gains that helped offset the downturn in domestic operations [1]

Core Viewpoint - United Parcel Service (UPS) experienced a significant pre-market surge, rising over 11% following the release of its third-quarter earnings report, which exceeded market expectations [1] Financial Performance - The company reported third-quarter revenue of $21.4 billion, surpassing the forecast of $20.87 billion [1] - Adjusted earnings per share (EPS) were $1.74, exceeding the expected $1.32 [1] - For the fourth quarter, UPS anticipates revenue of approximately $24 billion, compared to the market estimate of $23.87 billion [1]

格隆汇10月28日｜UPS：三季度营收214亿美元，预估208.7亿美元；经调整后每股收益1.74美元，预估 1.32美元。预计第四季度营收约为240亿美元，市场预估238.7亿美元。 ...

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]