What happened

Shares of United Parcel Service (NYSE:UPS) fell 5.7% on Tuesday morning before recovering somewhat after the company reported third-quarter revenue and earnings according to generally accepted accounting principles (GAAP) that missed expectations. The company also announced the resignation of its chief operating officer, raising questions about succession planning at the shipping giant.

So what

Before markets opened on Tuesday, UPS reported third-quarter earnings of $2.01 per share on revenue of $18.32 billion, missing the consensus earnings estimate by $0.06 per share and revenue by about $30 million. The company also reaffirmed its full-year guidance, but admitted that guidance "assumes no further deterioration regarding global trade uncertainty or U.S. industrial weakness."

A front view of a UPS-branded freighter aircraft

Image source: UPS.

The company reported strong 24% volume growth in its Next Day Air service, fueled by strong e-commerce demand both from Amazon.com and other retailers trying to keep pace with Amazon. UPS also said it was cutting capital spending by upwards of $500 million thanks to the work it has done automating its facilities.

The results seem to indicate UPS' volume strength is primarily in lower-margin products, with international and other more lucrative areas not performing as well as they could be.

UPS also surprised investors by announcing that COO Jim Barber, who was widely seen as the heir apparent to the CEO spot, would retire at year's end.

Now what

This is a difficult environment for shipping stocks, with companies pressured by global trade wars and concerns about the health of the U.S. consumer, but UPS so far has held up much better than archrival FedEx.

The quarter wasn't a blockbuster, but UPS did demonstrate some of the resilience of its business. Given the uncertainty surrounding the broader economy and Barber's surprise announcement, it is difficult to imagine UPS shares rocketing higher anytime soon, but this is a company with the wherewithal to survive regardless of economic conditions and reward long-term investors.