Shares in package delivery giant UPS (UPS -2.84%) were down 3.4% in trading before 10 a.m. this morning. The decline was in sympathy with a larger decline at peer FedEx (FDX -9.26%) after the release of its fiscal third-quarter 2025 earnings. Unfortunately, FedEx did not have good news for UPS.

FedEx's news shouldn't surprise anyone

As previously outlined, a slew of transportation and industrial companies, including heavyweights such as 3M and Delta Air Lines, have talked about either a sales pushout or customers holding back due to macroeconomic uncertainty. That's not great news for short-cycle businesses like package delivery companies, and FedEx's guidance and outlook seemed to confirm what others have said.

FedEx cut its full-year revenue outlook to "flat to slightly down year over year" compared to prior guidance for flat sales on 2024. Moreover, CFO John Dietrich said, "Our revised earnings outlook reflects continued weakness and uncertainty in the U.S. industrial economy, which is constraining demand for our business-to-business services."

What it means to UPS investors

FedEx's third-quarter 2025 earnings ended on Feb. 28 , while UPS's first-quarter 2025 earnings will end on March 31. While FedEx's results were OK, the outlook was likely cut based on what's happening in March as well. That suggests that UPS is likely to capture more of the weak trading in the period.

Image source: Getty Images.

Moreover, the specific weakness in business-to-business deliveries could hurt margins, as they tend to be higher-margin activities.

All told, UPS investors need to prepare for some near-term disappointment. That said, its long-term growth prospects look good, and it's exactly the sort of stock investors should keep an eye on to buy on weakness, provided the weakness in the economy proves temporary.