United Parcel Service (UPS) shares surged more than 10% in premarket trading on Tuesday after the world’s largest package delivery firm reported a stronger-than-expected third-quarter profit and issued an upbeat forecast for the year-end holiday period.
The Atlanta-based company said it expects fourth-quarter revenue of around $24 billion, topping Wall Street’s consensus estimate of $23.8 billion, according to LSEG data.
The results mark the strongest profit beat for UPS in more than four years and signal a possible rebound after months of weak investor sentiment.
UPS’s third-quarter adjusted earnings per share came in at $1.74, down slightly from $1.76 a year earlier but well above the $1.29 analysts expected, according to FactSet.
The margin of the beat was the largest since early 2021. Net income fell 14.8% to $1.31 billion, while total revenue declined 3.7% year-on-year to $21.42 billion but still exceeded expectations of $20.84 billion.
“The reintroduction of a 4Q guide, and one that points to upside to consensus, will likely add to the covering event today,” Evercore ISI analyst Jonathan Chappell had said ahead of the results, adding that expectations were “very low” coming into the print.
Domestic weakness offset by stronger international growth
UPS’s US domestic package business recorded revenue of $14.22 billion, a 2.6% drop from the prior year, as a decline in shipment volume offset an increase in revenue per package.
However, that still beat analyst estimates of $13.74 billion.
International revenue rose nearly 6% to $4.67 billion, above expectations of $4.4 billion, driven by higher export demand and improved pricing in Europe.
In contrast, the supply-chain and freight division saw a sharp 22.1% decline to $2.52 billion, missing forecasts of $2.69 billion amid continued weakness in global trade volumes.
Despite the mixed segment results, UPS executives said they expect revenue momentum to accelerate into the year’s final quarter, supported by peak holiday shipping volumes.
Cost cuts and restructuring deliver results
The company provided further details of its sweeping turnaround plan, which includes workforce reductions and property sales to boost efficiency.
UPS said it had eliminated 34,000 jobs, more than previously expected, as part of efforts to streamline operations and reduce reliance on former top customer Amazon.
The courier also completed a sale-leaseback transaction for five properties in the third quarter, generating a $330 million pre-tax gain.
In total, UPS said it has shuttered 93 leased and owned facilities through September, contributing to $2.2 billion in cost savings so far this year.
The company aims to achieve $3.5 billion in total annual savings by 2025.
“We are executing the most significant strategic shift in our company’s history, and the changes we are implementing are designed to deliver long-term value for all stakeholders,” CEO Carol Tomé said.
“With the holiday shipping season nearly upon us, we are positioned to run the most efficient peak in our history while providing industry-leading service to our customers for the eighth consecutive year.”
Outlook and market positioning
UPS shares have fallen 29% so far in 2025, underperforming the broader S&P 500’s 16.9% gain, but Tuesday’s rally suggests renewed investor confidence in the firm’s restructuring strategy.
The stock trades at 12.97 times forward earnings, slightly above rival FedEx’s 12.87 multiple, and carries a market capitalization of $75.6 billion.
Thirteen of 31 brokerages rate UPS as a “buy” or higher, 15 as “hold,” and three as “sell,” with a median price target of $100, according to LSEG data.
With its turnaround efforts gaining traction and a strong holiday quarter ahead, UPS appears poised to stabilize growth after a turbulent year in the global logistics industry.
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