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

UPS has had earnings and sales plunge since 2022, when there was a postpandemic shipping boom. (Spencer Platt/Getty Images)

Key Points

• United Parcel Service reported third-quarter earnings of $1.74 a share on sales of $21.4 billion, exceeding Wall Street expectations.
• UPS stock rose 8% after the earnings report, despite a 31% drop so far this year and a 37% drop over the past 12 months.
• The company eliminated 48,000 jobs and maintained its dividend, with adjusted operating profit margins increasing to 10%.

United Parcel Service stock jumped after the company delivered the quarter investors needed, cutting workers to control costs while backing the dividend at its current rate.

Tuesday morning, UPS reported third-quarter earnings per share of $1.74 from sales of $21.4 billion. Wall Street was looking for earnings of $1.32 from sales of $20.9 billion.

Guidance for the full year included dividend payments of about $5.5 billion, “subject to board approval.” That implies quarterly payouts of about $1.64, the current quarterly dividend.

UPS says fourth-quarter sales are expected to be about $24 billion. Wall Street currently projects $23.6 billion.

UPS stock rose 8% to $96.26 on Tuesday, while the S&P 500 and Dow Jones Industrial Average rose 0.2% and 0.3%, respectively.

Created with Highcharts 9.0.1United Parcel ServiceStock ticker: UPSSource: FactSetAs of Oct. 29, 4 p.m. ET

Created with Highcharts 9.0.1Aug. 2025Oct.80.082.585.087.590.092.595.097.5$100.0

Investors initially reacted to the report with relief for good reasons. The company had been through a tough couple of years. A year ago, in 2024’s third quarter, UPS reported earnings of $1.76 from sales of $22.2 billion.

Sales and earnings are down on lower domestic volumes and higher labor costs because of a 2023 deal with the Teamsters union. But the hard times really started after 2022, when UPS reported earnings of $12.94 from more than $100 billion in sales driven by a post-pandemic boom in shipping volumes.

The business environment has taken its toll on the stock. Coming into Tuesday trading, shares were down about 31% this year and 37% over the past 12 months.

Along with earnings, the company reiterated plans to reduce its workforce amid lower volumes and network-improvement efforts. Some 48,000 jobs were eliminated. Some of the lower volumes, however, are due to UPS walking away from less profitable business with Amazon.com.

UPS ended 2024 with about 490,000 employees.

Declines have left the stock trading for about 12.6 times estimated next year’s earnings, down from a 2022 average of about 15 times, and close to the lowest price-to-earnings ratio of the past decade.

Declines have also left UPS stock with a dividend yield of 7.4%, the third-highest yield in the S&P 500. Way-higher-than-average dividend yields aren’t a good thing. It signals investors are worried about a cut. The average yield for a dividend payer in the S&P 500 is about 2.3%.

UPS currently pays out $6.56 a year. That’s roughly what UPS will make in 2025, but less than what’s expected to earn in 2026. Those payout ratios are thin. Dividend payers in the S&P 500 paid out closer to 40% of net income as dividends over the past 12 months.

The dividend looks safe for now, and UPS’s quarter showed some unexpected improvement. Adjusted operating profit margins were 10% in the quarter, up from 8.8% in the second quarter of 2025 and up from 8.9% in the third quarter of 2024.

In an earnings preview report, Evercore ISI analyst Jonathan Chappell cut his 2026 earnings estimates because of more volume challenges—this time arising from the Trump administration’s trade policies, which have raised the cost of shipping small parcels to the U.S.

Volumes were down in the U.S., but rose in UPS’s international segment.

Chappell expects UPS to earn $7.05 in 2026, down from his prior call of closer to $7.50. The Wall Street consensus number is $7.06—up from an expected $6.44 in 2024, but a far cry from the nearly $13 in 2022.

He has a Hold rating and a $92 price target on the stock. Overall, 44% of analysts covering the stock rate it Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for UPS is about $99.

Options markets implied shares would move about 7% up or down after the results. UPS has moved an average of almost 8% after its past four quarterly reports. Shares rose once and fell three times over that span.

Write to Al Root at allen.root@dowjones.com