FedEx reported better-than-expected quarterly earnings and revenue on Tuesday, while also announcing plans to cut an additional $1 billion in costs over the next year.
The company confirmed it has met its prior $4 billion cost-cutting goal under its multi-year transformation strategy.
CEO Raj Subramaniam said the company achieved its “structural cost reduction target, in the face of ongoing headwinds,” and emphasized that FedEx remains focused on improving long-term profitability through continued integration and operational efficiency.
Despite the positive earnings results, FedEx shares fell about 5% in after-hours trading after the company issued first-quarter profit guidance that came in slightly below Wall Street expectations.
For the fiscal fourth quarter ended May 31, FedEx reported:
Adjusted earnings per share: $6.07 (vs. $5.84 expected)
Revenue: $22.22 billion (vs. $21.79 billion expected)
Net income rose to $1.65 billion, or $6.88 per share, compared to $1.47 billion, or $5.94 per share, a year earlier. Adjusted earnings excluded one-time items such as retirement-related accounting costs.
FedEx also saw growth in US shipping volumes. US daily package volume increased 6% year over year, with ground home delivery volume climbing 10%.
For the full fiscal year, FedEx reported:
Revenue: $87.9 billion, up slightly from $87.7 billion in fiscal 2024
Capital spending: $4.1 billion, down 22% from the prior year
According to the company, capital spending as a percentage of revenue was the lowest in its history.
FedEx offered mixed guidance for the fiscal first quarter of 2026:
Revenue: Expected to be flat to up 2% year over year, exceeding some analyst expectations
Adjusted EPS: Forecast at $3.40 to $4.00, slightly below the $4.06 consensus estimate
The company cited a $170 million headwind in international exports, driven largely by changes in US-China trade policy. Executive Vice President Brie Carere specifically noted the impact of “de minimis” import tax rules on lower-value shipments.
FedEx declined to provide full fiscal year 2026 earnings or profit guidance but said it expects to cut another $1 billion in costs through continued implementation of its DRIVE initiative, which began in fiscal 2023.
In December, FedEx announced plans to spin off its Freight division into a separate publicly traded company within 18 months. The company is also navigating a leadership transition following the recent passing of founder and executive chairman Fred Smith at age 80. Smith stepped down as CEO in 2022, with Subramaniam taking over leadership responsibilities.
