A FedEx truck was spotted navigating heavy traffic in New York City as the company announced strong earnings for its fiscal first quarter. The report, released on Thursday, revealed that FedEx exceeded expectations both in revenue and earnings per share, prompting a stock increase of over 5% in after-hours trading.
CEO Raj Subramaniam addressed analysts, noting that despite the volatility and uncertainty surrounding the global trade environment, FedEx’s results reflect the resilience of its network. He commended the dedication of the company’s workforce, highlighting their ability to adapt to evolving customer demands.
In more specific terms, FedEx reported adjusted earnings per share of $3.83, surpassing analysts’ expectations of $3.59. Revenue for the quarter reached $22.24 billion, higher than the anticipated $21.66 billion. Additionally, the company’s net income was reported at $820 million, or $3.46 per share, marking an increase from $790 million or $3.21 per share during the same quarter a year prior. Adjusting for costs associated with its FedEx Freight spin-off and other factors, net income stood at $910 million, equating to the aforementioned adjusted earnings per share.
Average daily package volumes in the U.S. rose by 6% overall, contributing to improved segment operating results due to higher domestic demand. However, the FedEx Freight segment saw operating results decline, impacted by lower revenue and increased wage expenses.
Looking ahead, FedEx anticipates revenue growth of 4% to 6% for 2026, significantly higher than the Wall Street estimate of 1.2%. The company also projected full-year earnings per share for fiscal year 2026 to be between $17.20 and $19, with a midpoint forecast of $18.10, closely aligned with the Wall Street estimate of $18.21.
Subramaniam acknowledged that the outlook remains uncertain, influenced by a “dynamic global operating environment.” During the quarter, FedEx faced $150 million in challenges linked to global trade conditions.
Part of the company’s ongoing strategy includes spinning off FedEx Freight into a new publicly traded entity, expected to be completed by June 2026. This move is part of a broader restructuring aimed at enhancing operational efficiency.
He also noted that FedEx currently manages the movement of approximately 17 million packages daily. This flexibility proved vital during the first quarter as the company adapted to shifting macroeconomic factors.
In light of recent changes in trade policy, FedEx announced a slight increase in shipping fees following the global termination of the “de minimis” exception, which had previously allowed shipments valued under $800 to enter the U.S. duty-free. The loss of this exemption particularly affected volumes previously sourced from China, but Subramaniam expressed confidence in the company’s ability to navigate these challenges by leveraging experience from earlier situations.
