Oct 23 (Reuters) - Wall Street expects United Parcel

Service ( UPS ) to report a rise in adjusted quarterly profit on

Thursday, even as concern mounts over stubbornly soft demand for

lucrative overnight shipping heading into the vital holiday

delivery season.

Analysts, on average, expect the world's largest delivery

firm to post adjusted earnings of $1.63 per share when it

reports third-quarter results before the market opens on

Thursday, according to Refinitiv data.

That would easily top the year-earlier quarter's adjusted

profit - but may do little to allay concern about results for

the fourth quarter, when package volumes typically soar.

The company's "near-term earnings could be pressured by a

still weak parcel demand backdrop," Barclays analyst Brandon

Oglenski said in a client note.

Indeed, rival FedEx ( FDX ) in September reported a sharp drop in

quarterly adjusted profit and trimmed its full-year forecasts

after its customers continued to trade down to slower, cheaper

services from speedy, pricier options.

UPS and FedEx ( FDX ) discounts to attract and retain

customers have intensified over the course of this year, even as

the firms unveiled surcharge increases that apply to more

packages, industry pricing experts said.

The companies are on a "hunt for revenue," said Mingshu

Bates, chief analytics officer at consultancy AFS Logistics.

Meanwhile, UPS is filling up its network with low-margin

deliveries for China-linked bargain retailers Temu and

Shein - a move that pummeled second-quarter profits. And, it is

taking on the United States Postal Service contract work that

depressed profits at FedEx ( FDX ).

Amazon ( AMZN ), which accounts for about 12% of UPS

business, remains a threat because it is delivering more of its

own packages, Barclays analyst Oglenski said.

"Long-term pressures from Amazon ( AMZN ), non-union FedEx ( FDX )

competition and limited dividend growth paint a relative tough

outlook for UPS shares," he said.