What Happened?

Shares of parcel delivery company UPS (NYSE: UPS) jumped 8.1% in the afternoon session after the company reported third-quarter earnings that surpassed analyst expectations. The parcel delivery company announced adjusted earnings per share of $1.74, which topped the consensus estimate of $1.31. Revenue also came in ahead of estimates at $21.4 billion, though this represented a 3.8% decline compared to the same quarter last year. Looking ahead, the company's revenue guidance for the fourth quarter of around $24 billion was roughly in line with analyst expectations. The better-than-expected profitability, despite declining year-over-year sales, drove the positive market reaction.

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What Is The Market Telling Us

United Parcel Service’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 17.6% on the news that the company reported weak fourth-quarter results and provided full-year revenue guidance, which missed significantly. Adding to concerns, UPS announced an agreement with its largest customer to cut volume by more than 50% by the second half of 2026, which might be a headwind to future growth. On the other hand, it was encouraging to see United Parcel Service beat analysts' EPS expectations this quarter. Overall, it was a worrisome quarter, and the outlook is weighing on shares.

United Parcel Service is down 22.3% since the beginning of the year, and at $96.25 per share, it is trading 30% below its 52-week high of $137.54 from November 2024. Investors who bought $1,000 worth of United Parcel Service’s shares 5 years ago would now be looking at an investment worth $617.83.

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