Why United Parcel Service (UPS) Shares Are Getting Obliterated Today

What Happened?

Shares of parcel delivery company UPS (NYSE:UPS) fell 8.8% in the afternoon session after the company reported second-quarter results that missed profit expectations and refrained from providing a full-year financial outlook, citing economic uncertainty. The shipping giant posted an adjusted earnings per share of $1.55, just shy of the $1.57 analysts had predicted. While revenue of $21.2 billion was slightly ahead of forecasts, it represented a nearly 3% decline from the previous year. The company's decision to not issue new full-year guidance appeared to be a significant driver of the stock's decline, as management pointed to "macro-economic uncertainty." Adding to the concerns, UPS’s U.S. domestic operating margin of 7% came in below the forecast of 7.3%, signaling pressure on profitability.

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What Is The Market Telling Us

United Parcel Service’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 22 days ago when the stock dropped 3% on the news that the major indices pulled back (Nasdaq -0.8%, S&P 500 -0.77%), largely due to escalating concerns surrounding the July 9th deadline for new US tariffs, now amplified by specific announcements. Earlier in the day, President Trump confirmed that Japan and South Korea would face new 25% tariffs on their imports to the US, effective August 1st. 

These announcements came ahead of the broader July 9th expiration of a 90-day pause on reciprocal tariffs, which failed to produce comprehensive trade deals with most nations. This action against two major trading partners, coupled with the ongoing threat of further tariffs on countries associated with the BRICS bloc, injected significant uncertainty and apprehension into global markets. Investors were likely reacting to the increased costs for businesses, potential disruptions to global supply chains, and the broader implications for international trade relations.

United Parcel Service is down 25.5% since the beginning of the year, and at $92.30 per share, it is trading 33.3% below its 52-week high of $138.35 from October 2024. Investors who bought $1,000 worth of United Parcel Service’s shares 5 years ago would now be looking at an investment worth $746.28.

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