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UPS Stock Up on Q3 Earnings & Revenue Beat, Strong Q4 Sales View
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Key Takeaways
UPS posts Q3 EPS of $1.74 and revenue of $21.4B, topping Zacks estimates but down year over year.
International Package sales rose 5.9%, offsetting weaker domestic and Supply Chain Solutions results.
UPS projects Q4 revenues near $24B and margins up to 11.5%, signaling improved performance ahead.
United Parcel Service (UPS - Free Report) reported healthy third-quarter 2025 results with both earnings per share and revenues surpassing the Zacks Consensus Estimate.
Quarterly earnings per share (excluding 19 cents from non-recurring items) of $1.74 beat the Zacks Consensus Estimate of $1.31 but declined 1.1% year over year. Revenues of $21.4 billion surpassed the Zacks Consensus Estimate of $20.8 billion but decreased 3.7% year over year.
Moreover, the management provided upbeat fourth-quarter sales guidance, projecting revenues of approximately $24 billion, above the Zacks Consensus Estimate of $23.74 billion. Adjusted operating margin for the December quarter is projected in the approximately 11-11.5% range, comparing favorably to the 10% reported in the September quarter. The top and bottom-line outperformance in the September quarter, despite volume woes in its domestic segment, and the upbeat fourth-quarter guidance naturally pleased investors, resulting in the stock gaining in early trading.
United Parcel Service Price, Consensus and EPS Surprise
U.S. Domestic Package revenues of $14.2 billion decreased 2.7% year over year, due to the expected decline in volume. However, revenue per piece and air cargo revenues were strong during the quarter. The actual segmental sales figure was higher than our estimation of $13.53 billion. Segmental operating profit (adjusted) fell 1.5% year over year to $905 million. The adjusted operating margin for the segment was 6.4%.
Revenues in the International Package division totaled $4.67 billion, which increased 5.9% year over year, owing to a 4.8% increase in average daily volume. The actual segmental sales figure was higher than our estimation of $4.4 billion. Segmental operating profit (adjusted) totaled $691 million, down 12.7% year over year. The adjusted operating margin for the segment was 14.8%.
Supply Chain Solutions’ revenues of $2.52 billion decreased 22.1% year over year, owing to the impact of the third quarter of 2024 divestiture of Coyote. The actual segmental sales figure was below our estimation of $2.72 billion. Operating profit (on an adjusted basis) increased to $536 million. The adjusted operating margin for the segment was 21.3%.
UPS’ 2025 Outlook Maintained
Capital expenditures are estimated to be around $3.5 billion, with dividend payments expected to be around $5.5 billion (subject to board approval) and share repurchases of around $1 billion (which have been completed). The effective tax rate is expected to be around 23.75%.
Q3 Performances of Some Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2025 earnings (excluding 46 cents from non-recurring items) of $1.71 per share, which beat the Zacks Consensus Estimate of $1.52. Earnings increased 14% on a year-over-year basis due to low fuel costs.
Revenues in the September-end quarter were $16.67 billion, beating the Zacks Consensus Estimate of $15.79 billion and increasing 6.4% on a year-over-year basis. Due to improving air-travel demand, adjusted operating revenues (excluding third-party refinery sales) increased 4.1% year over year to $15.2 billion.
United Airlines (UAL - Free Report) reported mixed third-quarter 2025 results wherein its earnings beat the Zacks Consensus Estimate, but revenues missed the same.
UAL's third-quarter 2025 adjusted earnings per share (EPS) (excluding 12 cents from non-recurring items) of $2.78 surpassed the Zacks Consensus Estimate of $2.64 but declined 16.5% on a year-over-year basis. The reported figure lies above the guided range of $2.25-$2.75.
Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.3 billion but increased 2.6% year over year. Passenger revenues (which accounted for 90.7% of the top line) increased 1.9% year over year to $13.8 billion. UAL flights transported 48,382 passengers in the third quarter, up 6.2% year over year.
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UPS Stock Up on Q3 Earnings & Revenue Beat, Strong Q4 Sales View
Key Takeaways
United Parcel Service (UPS - Free Report) reported healthy third-quarter 2025 results with both earnings per share and revenues surpassing the Zacks Consensus Estimate.
Quarterly earnings per share (excluding 19 cents from non-recurring items) of $1.74 beat the Zacks Consensus Estimate of $1.31 but declined 1.1% year over year. Revenues of $21.4 billion surpassed the Zacks Consensus Estimate of $20.8 billion but decreased 3.7% year over year.
Moreover, the management provided upbeat fourth-quarter sales guidance, projecting revenues of approximately $24 billion, above the Zacks Consensus Estimate of $23.74 billion. Adjusted operating margin for the December quarter is projected in the approximately 11-11.5% range, comparing favorably to the 10% reported in the September quarter. The top and bottom-line outperformance in the September quarter, despite volume woes in its domestic segment, and the upbeat fourth-quarter guidance naturally pleased investors, resulting in the stock gaining in early trading.
United Parcel Service Price, Consensus and EPS Surprise
United Parcel Service, Inc. price-consensus-eps-surprise-chart | United Parcel Service, Inc. Quote
Other Aspects of Q3 Earnings Report
U.S. Domestic Package revenues of $14.2 billion decreased 2.7% year over year, due to the expected decline in volume. However, revenue per piece and air cargo revenues were strong during the quarter. The actual segmental sales figure was higher than our estimation of $13.53 billion. Segmental operating profit (adjusted) fell 1.5% year over year to $905 million. The adjusted operating margin for the segment was 6.4%.
Revenues in the International Package division totaled $4.67 billion, which increased 5.9% year over year, owing to a 4.8% increase in average daily volume. The actual segmental sales figure was higher than our estimation of $4.4 billion. Segmental operating profit (adjusted) totaled $691 million, down 12.7% year over year. The adjusted operating margin for the segment was 14.8%.
Supply Chain Solutions’ revenues of $2.52 billion decreased 22.1% year over year, owing to the impact of the third quarter of 2024 divestiture of Coyote. The actual segmental sales figure was below our estimation of $2.72 billion. Operating profit (on an adjusted basis) increased to $536 million. The adjusted operating margin for the segment was 21.3%.
UPS’ 2025 Outlook Maintained
Capital expenditures are estimated to be around $3.5 billion, with dividend payments expected to be around $5.5 billion (subject to board approval) and share repurchases of around $1 billion (which have been completed). The effective tax rate is expected to be around 23.75%.
Currently, UPS carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performances of Some Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2025 earnings (excluding 46 cents from non-recurring items) of $1.71 per share, which beat the Zacks Consensus Estimate of $1.52. Earnings increased 14% on a year-over-year basis due to low fuel costs.
Revenues in the September-end quarter were $16.67 billion, beating the Zacks Consensus Estimate of $15.79 billion and increasing 6.4% on a year-over-year basis. Due to improving air-travel demand, adjusted operating revenues (excluding third-party refinery sales) increased 4.1% year over year to $15.2 billion.
United Airlines (UAL - Free Report) reported mixed third-quarter 2025 results wherein its earnings beat the Zacks Consensus Estimate, but revenues missed the same.
UAL's third-quarter 2025 adjusted earnings per share (EPS) (excluding 12 cents from non-recurring items) of $2.78 surpassed the Zacks Consensus Estimate of $2.64 but declined 16.5% on a year-over-year basis. The reported figure lies above the guided range of $2.25-$2.75.
Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.3 billion but increased 2.6% year over year. Passenger revenues (which accounted for 90.7% of the top line) increased 1.9% year over year to $13.8 billion. UAL flights transported 48,382 passengers in the third quarter, up 6.2% year over year.