UPS Stock Soars After Earnings. Its Dividend Is Safe—For Now.

Core Insights - UPS reported third-quarter earnings per share of $1.74 from sales of $21.4 billion, exceeding Wall Street's expectations of $1.32 from $20.9 billion in sales [3] - The company plans to maintain its dividend payments at approximately $5.5 billion for the full year, implying quarterly payouts of about $1.64, which matches the current quarterly dividend [3] - UPS's stock rose by 7.5% to $95.99 following the earnings report, reflecting investor relief after a challenging period for the company [4] Financial Performance - UPS's earnings and sales have declined since 2022, when the company benefited from a post-pandemic shipping boom, reporting earnings of $12.94 from over $100 billion in sales [5] - The company faced lower domestic volumes and higher labor costs due to a 2023 agreement with the Teamsters union, leading to a significant drop in stock value, down about 31% this year and 37% over the past 12 months [6] - Adjusted operating profit margins improved to 10% in the latest quarter, up from 8.8% in Q2 2025 and 8.9% in Q3 2024 [9] Workforce and Cost Management - UPS plans to eliminate 34,000 operational jobs in addition to 14,000 management positions previously announced, as part of efforts to control costs amid lower shipping volumes [6] - The company ended 2024 with approximately 490,000 employees [6] Market Position and Analyst Ratings - UPS's stock is currently trading at about 12.6 times estimated next year's earnings, down from an average of 15 times in 2022, indicating a low price-to-earnings ratio [7] - The stock has a dividend yield of 7.4%, significantly higher than the S&P 500 average of 2.3%, which raises concerns about potential cuts [7][8] - Analyst Jonathan Chappell revised his 2026 earnings estimate for UPS to $7.05, down from $7.50, with a Hold rating and a price target of $92 [10][11]