UPS has cut 34,000 jobs - a lot more than planned - and earnings show the move paid off

By Tomi Kilgore

UPS's stock jumps toward its biggest post-earnings gain in more than three years, as investors cheered the aggressive moves to make deliveries more profitable

UPS's stock looked to surge after the company announced it beat profits by the widest margin in more than four years.

Shares of United Parcel Service Inc. powered higher Tuesday, after the package-delivery giant reported third-quarter earnings that beat expectations by the widest margin in years and said it cut a lot more jobs than it previously said were planned.

The company disclosed that through September, it had reduced its workforce by 34,000 employees, which represented 6.9% of the approximately 490,000 employees it had at the end of 2024. UPS also closed 93 leased and owned buildings this year. The company had said it planned to cut 20,000 jobs and close dozens of buildings this year.

Investors cheered the company's more aggressive move to reconfigure its delivery network, to make it more efficient and profitable, while also expressing relief that UPS provided a fourth-quarter revenue outlook that was above expectations. The company had previously said it wouldn't provide a full-year revenue estimate due to uncertainties about tariffs and the economy, so investors welcomed any forward guidance.

The stock (UPS) climbed 6.8% toward a three-month in midday trading. That put it on track for the biggest one-day, post-earnings gain since it soared 14.1% on Feb. 1, 2022, according to FactSet data.

The company said that, with its network changes, it cut costs by $2.2 billion this year, through Sept. 30, and it expects to save $3.5 billion over the full year. The savings come as UPS said the decline in volume from Amazon.com Inc. (AMZN), which was not profitable, accelerated in the latest quarter to 21.2% from 13% in the first half of the year.

Read: UPS to cut its Amazon business by more than 50%. Here's why.

The move seems to be paying off. The company reported net income for the quarter to Sept. 30 that fell 14.8% to $1.31 billion, but adjusted earnings per share, which excludes nonrecurring items, of $1.74 beat the average analyst estimate compiled by FactSet of $1.29. The margin of that beat was the widest since the first quarter of 2021, according to FactSet data.

With the cuts to Amazon's volume, as well as other less-profitable e-commerce volume, UPS's said third-quarter average daily package volume in the U.S. dropped 12.3% to 16.15 million pieces. It was worth it, however, as revenue per piece increased 9.8% and operating margin - a measure of underlying profitability - improved by 10 basis points (0.10 percentage points) to 6.4%.

Total revenue declined 3.7% to $21.42 billion but was above the FactSet consensus of $20.84 billion.

UPS's domestic package business saw revenue fall 2.6% to $14.22 billion, as a decline in volume offset an increase in revenue per package, but that beat the FactSet consensus of $13.74 billion.

Meanwhile, international revenue rose 5.9% to $4.67 billion to top expectations of $4.4 billion, while supply-chain and freight revenue dropped 22.1% to $2.52 billion to miss expectations of $2.69 billion.

For the fourth quarter, UPS expects revenue of $24 billion, which is above the current FactSet consensus of $23.82 billion. And operating margin on for the U.S. package business is expected to improve significantly, to 9.5% to 10%, as ADV is seen picking up and as holiday demand surcharges kick in.

Even with Tuesday's rally, the stock has slumped 24.5% in 2025, while shares of rival FedEx Corp. (FDX) have lost 10.9% and the S&P 500 index SPX has advanced 17.1%.

-Tomi Kilgore

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10-28-25 1240ET