Updated version 2 - Repost - UPS raises annual performance outlook, high-margin parcel business drives quarterly profit above expectations

Rewrite the first paragraph to reflect quarterly profits beating expectations, and add details throughout the article

Reuters, October 27 - United Parcel Service (UPS, UPS.N) raised its annual revenue and profit outlook on Tuesday after reporting quarterly earnings that exceeded market expectations, driven by growth in high-margin international air freight business and a reduction in lower-margin deliveries for Amazon.com.

Widely regarded as a leading indicator of global economic activity, the world's largest parcel delivery company said its $3 billion cost-saving target for this year is proceeding as planned.

As the company reduces millions of door-to-door parcel deliveries for its biggest client Amazon AMZN.O, it has closed several facilities and cut thousands of positions.

Rival FedEx (FedEx, FDX.N) will release its earnings report on Wednesday, pursuing a similar strategy. Investors are pressuring both companies to focus on high-value parcel operations to demonstrate progress in improving profit margins.

UPS appears to be benefiting from these measures. The U.S. domestic parcel business segment (accounting for 60% of UPS's total revenue) saw its quarterly adjusted operating margin rise from 6.4% previously to 7%.

The smaller but more profitable international parcel business also reported that its third-quarter adjusted operating margin reached 14.9%, up from last year's 14.8%.

UPS shares rose 1.2% in premarket trading, while FedEx shares increased by 0.8%.

The Atlanta-based delivery giant now expects adjusted earnings per share of about $7.28 in 2026, up from its July forecast of $7.22. According to data compiled by LSEG, analysts expect the company’s earnings per share to be $7.19.

The company forecasts full-year revenue of $92.6 billion, higher than its previous estimate of $91.2 billion and above analysts' forecast of $91.73 billion.

In the third quarter, UPS reported adjusted earnings per share of $1.69, down fromlast year's $1.74, but above analysts' expected $1.63.

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