FedEx posts strong earnings results in last quarter with freight business
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- FedEx beat Wall Street expectations in Q4 with adjusted EPS of $6.31 versus $5.96 expected and revenue of $25.01 billion versus $24.04 billion expected.
- FedEx Freight spun off as a separate publicly traded company on June 1 and paid a roughly $4.1 billion cash dividend to FedEx Corporation as part of the separation.
- Shares of FedEx dropped about 6% in extended trading despite the earnings beat and the $4.1 billion spinoff dividend.
- FedEx reported full-year revenue of $94.7 billion, up from $87.9 billion the prior year, and Q4 net income of $1.6 billion ($6.60 per share), down from $1.65 billion ($6.88 per share) a year earlier.
- CEO Raj Subramaniam attributed the results to the company's strategy, citing strong free cash flow and FY26 results that "far exceeded" initial outlook.
- FedEx is shifting its fiscal year-end from May 31 to December 31, effective earlier this month, and guided to 11% revenue growth and adjusted EPS of $16.90–$18.10 for the new full year.
- Fuel costs surged 66% to $1.43 billion from $864 million a year ago, though executives said demand has not been impacted, and U.S. pricing rose 10%.
Why it matters: FedEx is fundamentally reshaping its business: the FedEx Freight spinoff delivered a $4.1 billion cash infusion, and the shift to a calendar fiscal year signals the company is repositioning around its remaining parcel and express operations. The 6% post-earnings drop suggests investors want more than a beat — they want proof the leaner FedEx can sustain the 10% U.S. pricing gains and absorb the 66% fuel cost spike without margin erosion.
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