UPS Earnings: Margins Disappoint on Higher Than Expected Shipment Diversions

UPS third-quarter top line fell 13% year over year (removing foreign exchange); this was below our forecast because of greater than expected domestic package volume diversions resulting from the potential Teamster's strike. Relative to third-quarter 2022, the revenue decline stems from lower overall package activity, rate and demand normalization for the truck brokerage and global forwarding operations, and lower fuel surcharges. That said, core pricing remains positive.