United Parcel Service, Inc. (NYSE:UPS) shares surged on Tuesday after the company announced third-quarter 2025 results that exceeded Wall Street estimates, signaling stronger operational momentum heading into the holiday season.
UPS reported consolidated revenue of $21.4 billion, beating the $20.832 billion estimate, and adjusted diluted EPS of $1.74, above the $1.31 consensus.
GAAP diluted EPS was $1.55, while consolidated operating profit came in at $1.8 billion, or $2.1 billion on an adjusted basis.
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UPS said GAAP results included a net charge of $164 million, or 19 cents per diluted share, which comprised after-tax transformation strategy costs of $250 million, partially offset by an $86 million income tax valuation allowance reversal.
The company also completed a sale-leaseback transaction on five properties, generating a $330 million pre-tax gain within its Supply Chain Solutions unit, contributing 30 cents to diluted EPS.
CEO Highlights Strategic Progress
“I want to extend my gratitude to all UPSers for their dedication and steadfast commitment to serving our customers,” said Carol Tomé, UPS chief executive officer. “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. 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.”
Segment Performance
In the U.S. Domestic segment, revenue fell 2.6% year over year to $14.22 billion, primarily due to an expected decline in volume, partially offset by higher revenue per piece and air cargo revenue. Operating profit was $603 million, or $905 million on an adjusted basis, with an operating margin of 4.2% and an adjusted margin of 6.4%.
In the International segment, revenue rose 5.9% to $4.67 billion, driven by a 4.8% increase in average daily volume. Operating profit was $676 million, or $691 million on an adjusted basis, with an operating margin of 14.5% and an adjusted margin of 14.8%.
Revenue in the Supply Chain Solutions segment declined 22.1% to $2.52 billion, reflecting the impact of the 2024 divestiture of Coyote. Operating profit rose to $525 million from $344 million in the prior year, or $536 million adjusted, with an operating margin of 20.8% and an adjusted margin of 21.3%.
Outlook
For the fourth quarter of 2025, UPS expects consolidated revenue of approximately $24.0 billion, exceeding the previously estimated $23.83 billion, and a non-GAAP adjusted operating margin of between 11.0% and 11.5%.
For the full year, UPS reaffirmed guidance for capital expenditures of about $3.5 billion, dividend payments of around $5.5 billion (subject to board approval), an effective tax rate of 23.75%, and pension contributions of $1.4 billion, of which $1.3 billion have been made. The company also said it has completed $1.0 billion in share repurchases for the year.
Price Action: UPS shares were trading higher by 10.54% to $98.62 premarket at last check Tuesday.
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