FedEx recently announced its earnings for the fiscal fourth quarter, surpassing Wall Street forecasts both in earnings and revenue. This earnings report is significant as it is the final quarter that includes the company’s freight division before it spun off into a separate entity, FedEx Freight, on June 1. In connection with this transition, FedEx Freight paid a substantial cash dividend of approximately $4.1 billion to the parent company.
Despite the encouraging earnings report, shares of FedEx fell by about 6% in after-hours trading. In the quarter ending May 31, the company generated earnings per share of $6.31 (adjusted), exceeding the anticipated $5.96. Additionally, revenue came in at $25.01 billion, beating analyst expectations of $24.04 billion.
Specifically, FedEx Express achieved revenue of $21.57 billion, surpassing StreetAccount estimates of $20.75 billion. The company reported a 3% year-over-year increase in domestic volume, along with a 3% rise in U.S. priority volume.
For the entire fiscal year, FedEx reported a net income of $1.6 billion, or $6.60 per share, compared to $1.65 billion, or $6.88 per share, in the previous year. After adjusting for one-time costs related to the spinoff and retirement plan changes, the adjusted earnings per share stood at $6.31. Overall, the company’s revenue for the full fiscal year reached $94.7 billion, marking a significant increase from $87.9 billion the prior year.
CEO Raj Subramaniam expressed confidence in the company’s strategic direction, stating, “The momentum you’re seeing across our business is proof that our strategy is working.” He pointed out that these strategies are yielding favorable financial outcomes, evidenced by strong free cash flow and results for fiscal year ’26 that have significantly exceeded initial projections.
Moreover, FedEx has made a strategic change by shifting its fiscal year-end from May 31 to December 31. Looking ahead, the company projects an 11% year-over-year revenue growth for the upcoming fiscal year, alongside adjusted diluted earnings per share anticipated to be between $16.90 and $18.10.
On the operational front, FedEx reported a notable increase in fuel costs, rising from $864 million in the previous year to $1.43 billion, a 66% jump. However, company executives indicated that the rise in fuel prices has not adversely affected demand. Additionally, they noted a 10% increase in U.S. pricing, signaling a strong market position despite rising operational costs.
