What Happened?

Shares of parcel delivery company UPS (NYSE:UPS) fell 17.6% in the morning session after the company reported weak fourth-quarter results and provided full-year revenue guidance, which missed significantly. Adding to concerns, UPS announced an agreement with its largest customer (Amazon) to cut volume by more than 50% by the second half of 2026, which might be a headwind to future growth. On the other hand, it was encouraging to see United Parcel Service beat analysts' EPS expectations this quarter. Overall, it was a worrisome quarter, and the outlook is weighing on shares.

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What The Market Is Telling Us

United Parcel Service’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for United Parcel Service and indicate this news significantly impacted the market’s perception of the business. The biggest move we wrote about over the last year was 6 months ago when the stock dropped 13.5% on the news that the company reported second-quarter earnings results. Its EPS missed, and its revenue fell short of Wall Street's estimates. The outlook wasn't encouraging, as the company slightly lowered its full-year revenue guidance. It also lowered full year operating margin guidance by a more significant amount. Overall, this was a mediocre quarter for United Parcel Service.

United Parcel Service is down 8.3% since the beginning of the year, and at $113.57 per share, it is trading 27.8% below its 52-week high of $157.38 from March 2024. Investors who bought $1,000 worth of United Parcel Service’s shares 5 years ago would now be looking at an investment worth $1,052.

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