UPS Fails to Deliver on Earnings, Shares Drop

After wavering for much of the day, major U.S. equities indexes slipped in the afternoon to end Tuesday in negative territory. The session came as earnings season intensified, with anticipation of reports from Tesla (TSLA) and Google parent Alphabet (GOOGL) set to be released after the closing bell.

Companies with freshly reported quarterly results dominated the list of stocks making major moves on the day, with investors reacting strongly to earnings beats and misses as well as updates to forward guidance.

The S&P 500 slipped 0.2%, while the Nasdaq edged 0.1% lower heading into a string of reports from big-name tech firms. The Dow ended the session with a minimal loss of less than 0.1%.

United Parcel Service (UPS) shares plunged 12.1%, suffering the heaviest losses of any S&P 500 stock, after the package delivery giant’s second-quarter sales and profits fell short of expectations. Softness in freight demand and pricing issues across the shipping sector contributed to the weakness during the quarter. UPS also trimmed its full-year revenue guidance and operating margin forecast, citing the impact of lower-profit shipments from new e-commerce customers.

Shares of Paccar (PCAR) dropped 11.0% as the commercial truck designer and manufacturer’s second-quarter profits declined year over year and fell shy of analysts’ forecasts. While the company is working to expand its portfolio with emissions-free vehicles, elevated levels of capital spending dragged on Paccar’s performance during the quarter, in addition to inflationary pressure and softness in freight markets.

A.O. Smith (AOS) shares slipped 9.4% in the wake of the water heater and boiler manufacturer’s quarterly earnings report. Although revenue came in ahead of estimates and earnings per share (EPS) matched expectations, softness in the real estate market and elevated steel prices weighed on the results.

Shares of NXP Semiconductors (NXPI) sank 7.6% after the Netherlands-based chipmaker provided weaker-than-expected guidance for the current quarter. The lower forecast relates to weakness in the automotive industry, which is NXP’s largest segment, as customers rein in spending amid geopolitical risks.

Pentair (PNR) shares jumped 9.0%, marking Tuesday’s top performance in the S&P 500, after the water treatment company topped analysts’ estimates with its second-quarter net sales and EPS results. Pentair also boosted its guidance for the third quarter, predicting that margin expansion would be stronger than previously forecast as the firm focuses on operational efficiencies amid the challenging macroeconomic environment.

Shares of financial index and analytics provider MSCI (MSCI) soared 7.9% after the firm reported better-than-expected sales and profits for the second quarter. An increase in recurring subscription revenue helped drive the results, with strong growth in market cap-weighted indexes.

Sherwin-Williams (SHW) shares also benefitted from a strong earnings report, gaining 6.9% after the paint distributor disclosed its latest quarterly results. Although revenue came in slightly below estimates, adjusted EPS exceeded forecasts, with gains in residential markets counterbalancing softer industrial demand. Sherwin-Williams also boosted its full-year profit guidance.

Aircraft engine and parts supplier GE Aerospace (GE) became another earnings winner, reporting better-than-anticipated revenue and net income for the second quarter while increasing its forecasts for the full year. Analysts have pointed to the company’s potential to benefit from growth in the aviation industry, highlighting its diversified product and customer portfolio. GE Aerospace shares lifted 5.7% following the earnings news.