United Parcel Service (NYSE: UPS) will report third-quarter earnings on October 18, with potential for disappointment. Management may need to address the stock’s decline and long-term growth prospects. There are concerns about the sustainability of the 7.6% dividend yield and lack of coverage by free cash flow.

CEO Carol Tome defends UPS’s dividend as financially sound. However, the $6.5 billion in dividends and share buybacks exceeds current free cash flow. Management lacks guidance for full-year results due to uncertainties, impacting the small and medium-sized business market volume.

The upcoming UPS earnings release may bring volatility, with potential for dividend cuts. Investors await guidance updates and market reactions. Stock Advisor did not list UPS among the 10 best stocks to buy now, indicating potential challenges for the company.

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Read more at Yahoo Finance: Where Will UPS Be After Its Next Earnings Report?