Here’s a breakdown of the provided text, focusing on the key information about UPS and the broader market context:
UPS Share News & Performance:
Weak Quarterly Figures: UPS reported weak quarterly results, causing its share price to fall below $90, a level not seen as the beginning of the COVID-19 pandemic in 2020.
No 2025 Forecast: For the second consecutive time, UPS executives decided not to provide a forecast for 2025.This is attributed to the Trump administration’s fluctuating customs tariffs, which directly impact trade flows.
Q2 Missed Profit Forecasts: UPS narrowly missed its Q2 profit forecasts. Sales Exceeded Forecasts but Declined Year-over-Year: Sales exceeded Wall Street’s expectations by $350 million but were down 3% compared to the previous year.
Q2 Results: Adjusted profit per share (EPS) was $1.55 on sales of $21.2 billion.
Reasons for Sales Decline:
End of Amazon Partnership: The low-margin partnership with Amazon has concluded.
Sale of Coyote Logistics: The sale of the Coyote Logistics business to XPO led to a decline in the Supply Chain Solutions segment. Shipping Segment Performance:
US Shipping: Sales fell by 0.8% to $14.1 billion annually.
International Shipping: Sales rose by 2.6% to $4.5 billion annually.
package Volume: A total of 19.74 million packages were sent in Q2, a 5.7% decrease from the previous year. This is largely due to the Amazon partnership withdrawal. Average Sales Per Package: despite the volume decrease, the average sales per package rose by 4.8% to $14.34 annually.
CEO’s Statement: CEO Carol Tomรฉ acknowledged market complexity and execution strength, expressing confidence in strategic initiatives for long-term financial services and competitive advantage.
Bank of America Downgrade: Bank of America lowered its price target for UPS shares from $115 to $98, citing increased tariff pressure on small and medium-sized businesses.
UPS Share Forecast & Concerns:
Downward Trend: UPS shares have been on a downward trend since reaching an all-time high of over $233 in February 2022.
Market Trust: The current share price reflects low market trust in the company.
Dividend Burden: The 7% dividend, increased annually since 2010, is seen as a burden. The projected dividend for 2025 ($6.56) is expected to consume around 94% of the projected annual profit ($6.97 per share), which is now uncertain due to the withdrawn forecast.
Dividend Cut Suspected: The market suspects the board may cut the dividend to provide more financial versatility, given the uncertain outlook for the next 18 months. Support Area: UPS is expected to trade in the support area of $82 to $90, a range seen five years ago.
Break Below Support: A break below $82 (the COVID-19 low) would send UPS shares into “no man’s land.”
Broader Market Context:
mixed Market: The wider market is mixed. Dow Jones: Falling 0.1% at lunchtime.
Nasdaq Composite: Rising shyly. Investor Waiting: Investors are awaiting a speech from Federal reserve (FED) Chairman Jerome Powell following an interest rate decision, which could substantially influence markets in the late afternoon.
Key Economic Data Ahead:
Thursday: Personal Consumption Expenditures (PCE) inflation data.
Friday: Nonfarm Payrolls (NFP) for July (extremely meaningful).
Trump Administration Tariffs: The Trump administration will begin determining customs tariffs for countries without existing trade agreements on Friday.
major Earnings After Close: Microsoft (MSFT), Meta Platforms (META), and Qualcomm (QCOM) are scheduled to release their quarterly figures after the market closes.
UPS is facing significant headwinds due to a combination of factors including the end of its Amazon partnership, the sale of a business segment, and uncertainty surrounding trade policies. The market is reacting negatively, with concerns about the company’s dividend sustainability and future profitability. The broader market is also in a holding pattern,awaiting key economic data and the Federal Reserve’s pronouncements.