FedEx said it expects revenue to increase by about 11% for the coming year and forecasted earnings per share in a range of $16.90 to $18.10, after publishing higher adjusted profit for the fourth quarter. Management attributed the quarterly improvement largely to stronger pricing in its parcel business.
The updated full-year targets coincide with a change in FedEx’s fiscal year to align with the calendar year - its fiscal year previously ended on May 31 - and follow the recent separation of its freight trucking operation, FedEx Freight, which was spun off on June 1. The company said the multi-year restructuring program that included the spin-off is intended to simplify operations and generate billions of dollars in cost savings.
For the quarter ended May 31, FedEx reported adjusted earnings of $6.31 per share, up from $6.07 a year earlier. Quarterly revenue rose 12.6% to $25.0 billion, reflecting robust domestic demand and higher package yields.
Within the business, the core express segment posted a 14% rise in revenue. The freight trucking unit, whose results are included in the quarter despite the recent spin-off, recorded revenue growth of 5%.
FedEx highlighted that operating results in its Federal Express segment improved during the quarter due to higher U.S. domestic and International Priority package yields. At the same time, the company noted notable cost pressure from fuel, reporting a 66% increase in fuel expenses for the period.
The carrier operates a significant air network, with a fleet that comprises 391 cargo jets and 317 turboprop aircraft. While Wall Street attention remains fixed on the package delivery business, management acknowledged a mixed demand backdrop: ongoing softness in e-commerce volume but increasing strength in premium, overnight delivery services.
FedEx and its rival UPS are both managing the effects of shifting U.S. trade policies. The end of U.S. duty-free, so-called de minimis, treatment for low-value e-commerce shipments from large China-linked discount retailers such as Shein and Temu has weighed on parcel volumes handled by major carriers.
The company’s quarterly results include the now-separated freight operation, but investors and analysts are closely watching trends in the package business for signs of durable recovery or further pressure driven by trade-policy changes and retail demand patterns.
Data points from the quarter - Adjusted profit per share: $6.31 (up from $6.07 a year earlier); Quarterly revenue: $25.0 billion, up 12.6%; Express segment revenue: +14%; Freight unit revenue: +5%; Fuel costs: +66%; Fleet: 391 cargo jets, 317 turboprops.