Behemoth package carrier United Parcel Service (NYSE: UPS) will release Q3 earnings on Oct. 24, which should be noteworthy. Rival FedEx (NYSE: FDX) disappointed the market recently with its first-quarter 2025 earnings report amid management talk of weakening business-to-business (B2B) demand, pressure on domestic deliveries, and customers shifting to lower-priced alternatives.

Let's see what this could all mean for UPS and its shareholders.

What investors can expect from UPS

It's never good when a key rival reports such conditions, and it's worse that FedEx cut its 2025 guidance just one quarter after initiating it. So UPS investors are rightly cautious going into the earnings report.

With UPS already lowering its guidance in its July earnings call, will it do so again, or is the bad news already implied in its existing guidance and possibly its share price, too?

The critical number to follow with UPS

A reiteration of full-year guidance should lift the stock, and at least one Wall Street analyst believes UPS has a pathway to reaching its full-year earnings guidance. While it's tough to know what the transportation company will report and guide toward, investors can keep track of one key metric: its domestic package average revenue per piece.

As FedEx reported for its business, UPS is seeing a shift toward lower-yielding deliveries, but UPS management expects delivery volumes to keep growing in the third quarter. As such, it's reasonable to expect U.S. domestic package year-over-year volume growth, but where will its average revenue per piece be?

The debate over UPS stock

CEO Carol Tome argued in the July conference call that UPS had "new e-commerce entrants into the United States. And their volume, well, it's exploded. It was certainly more than we anticipated." Given that the "exploding" deliveries tended to be lower yielding, revenue per piece was pressured in the second quarter.

However, a doubter might argue that UPS only hit its volume growth target because it took on lower-margin deliveries. This is a matter for debate likely to continue, but the average revenue per piece number from the upcoming report should throw a lot of color on the company's results.

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