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{\"0\":\"FedEx posted fiscal Q1 EPS of $3.83 and revenue of $22.2B, topping estimates and improving year over year.\",\"1\":\"Operating margin rose to 5.3% as U.S. package revenue strength and cost cuts boosted quarterly results.\",\"2\":\"FedEx plans to spin off its Freight unit as a separate public company by June 2026 under ticker FDXF.\"}
FedEx Corporation (FDX - Free Report) reported solid first-quarter fiscal 2026 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 37 cents from non-recurring items) of $3.83 per share beat the Zacks Consensus Estimate of $3.65 as well as improved 6.4% year over year. Share repurchases boosted fiscal first-quarter earnings by 2 cents per share.
Revenues of $22.2 billion came ahead of the Zacks Consensus Estimate of $21.7 billion and improved 3% from the year-ago fiscal quarter’s reported figure.
Operating income, on a reported basis, increased 10% to $1.19 billion from the year-ago fiscal quarter’s reported number. Operating margin rose to 5.3% from 5.0% in the year-ago reported quarter. Operating results improved in the first quarter on the back of strength in U.S. domestic package revenues and continued structural cost reduction. However, results were unfavorably affected by a non-recurring income tax expense of $16 million (7 cents per share).
Operating expenses (reported basis) increased by 3% to $21.1 billion.
FedEx Corporation Price, Consensus and EPS Surprise
Raj Subramaniam, FDX president and chief executive officer, stated, “Our earnings growth underscores the success of our strategic initiatives, as we are flexing our network and reducing our cost-to-serve, while further enhancing our value proposition and customer experience. Our strategic initiatives, paired with our unique operational data platform from moving 17 million packages through our network daily, position us well to serve our customers in any environment and to create long-term value for our stockholders.”
The planned spin-off of FedEx Freight into a new publicly traded company is on it way and is anticipated to be achieved in a tax-efficient manner for FDX shareholders and executed by June 2026. Once completed, FedEx Freight will operate as a separately traded public company, listed on the New York Stock Exchange under the ticker symbol FDXF.
Segmental Performance During the Quarter
FedEx Express segment’s revenues grew 4% year over year to $19.1 billion. Federal Express segment was aided by higher U.S. domestic and international priority package yields, continued cost savings from transformation initiatives, and increased U.S. domestic package volume. These were partially offset by higher wage and purchased transportation rates, the impact of the evolving global trade environment on international export package demand, and the expiration of the U.S. Postal Service contract. Our estimate is pegged at $18.5 billion.
FedEx Freight revenues fell 3% from the year-ago fiscal quarter’s reported figure to $2.25 billion (lower than our model estimate figure of $2.27 billion). The FedEx Freight segment was hurt by lower revenue, higher wage rates and the hiring of additional dedicated LTL sales professionals.
Average daily shipments fell 2% year over year. Capital expenditures for the reported quarter came in at $623 million.
Liquidity
FedEx exited first-quarter fiscal 2026 with cash and cash equivalents of $6.16 billion compared with $5.50 billion at the end of the prior quarter. Long-term debt (less current portion) was $20.2 billion compared with $19.1 billion at the end of the prior quarter.
FedEx completed $500 million in share repurchases during the reported quarter. As of Aug 31, 2025, FDX had $1.6 billion available for repurchases under its 2024 stock repurchase authorization.
Outlook
For the full year fiscal 2026, FedEx expects revenue growth in the range of 4-6% on a year-over-year basis. The effective tax rate (ETR) is estimated at around 25%. Pension contributions are now expected to be up to $400 million compared with the prior view of $600 million.
Diluted earnings per share (EPS) are anticipated between $14.20 and $16.00 before the MTM retirement plans accounting adjustments, and after excluding costs related to business optimization initiatives, the planned spin-off of FedEx Freight, and the planned change in the company's fiscal year end, EPS is expected between $17.20 and $19.00.
For full-year fiscal 2026, FedEx continues to anticipate permanent cost reductions of $1 billion in transformation-related savings from structural cost reductions and the advancement of Network 2.0. FDX anticipates capital spending of $4.5 billion, prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation.
Latest Earnings Results of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.
Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year.
Total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT’s second-quarter revenue performance witnessed a 6% increase in Intermodal (JBI) loads, a 13% increase in Truckload (JBT) loads, a 3% increase in Dedicated Contract Services (DCS) productivity and a 6% increase in Integrated Capacity Solutions (ICS) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenue, increased 1% on a year-over-year basis.
United Airlines Holdings, Inc. (UAL - Free Report) reported mixed second-quarter 2025 results wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.
UAL's second-quarter 2025 adjusted earnings per share of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25.
Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.
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FedEx Surpasses Q1 Earnings & Revenue Estimates, Improves Y/Y
Key Takeaways
FedEx Corporation (FDX - Free Report) reported solid first-quarter fiscal 2026 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 37 cents from non-recurring items) of $3.83 per share beat the Zacks Consensus Estimate of $3.65 as well as improved 6.4% year over year. Share repurchases boosted fiscal first-quarter earnings by 2 cents per share.
Revenues of $22.2 billion came ahead of the Zacks Consensus Estimate of $21.7 billion and improved 3% from the year-ago fiscal quarter’s reported figure.
Operating income, on a reported basis, increased 10% to $1.19 billion from the year-ago fiscal quarter’s reported number. Operating margin rose to 5.3% from 5.0% in the year-ago reported quarter. Operating results improved in the first quarter on the back of strength in U.S. domestic package revenues and continued structural cost reduction. However, results were unfavorably affected by a non-recurring income tax expense of $16 million (7 cents per share).
Operating expenses (reported basis) increased by 3% to $21.1 billion.
FedEx Corporation Price, Consensus and EPS Surprise
FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote
Raj Subramaniam, FDX president and chief executive officer, stated, “Our earnings growth underscores the success of our strategic initiatives, as we are flexing our network and reducing our cost-to-serve, while further enhancing our value proposition and customer experience. Our strategic initiatives, paired with our unique operational data platform from moving 17 million packages through our network daily, position us well to serve our customers in any environment and to create long-term value for our stockholders.”
The planned spin-off of FedEx Freight into a new publicly traded company is on it way and is anticipated to be achieved in a tax-efficient manner for FDX shareholders and executed by June 2026. Once completed, FedEx Freight will operate as a separately traded public company, listed on the New York Stock Exchange under the ticker symbol FDXF.
Segmental Performance During the Quarter
FedEx Express segment’s revenues grew 4% year over year to $19.1 billion. Federal Express segment was aided by higher U.S. domestic and international priority package yields, continued cost savings from transformation initiatives, and increased U.S. domestic package volume. These were partially offset by higher wage and purchased transportation rates, the impact of the evolving global trade environment on international export package demand, and the expiration of the U.S. Postal Service contract. Our estimate is pegged at $18.5 billion.
FedEx Freight revenues fell 3% from the year-ago fiscal quarter’s reported figure to $2.25 billion (lower than our model estimate figure of $2.27 billion). The FedEx Freight segment was hurt by lower revenue, higher wage rates and the hiring of additional dedicated LTL sales professionals.
Average daily shipments fell 2% year over year. Capital expenditures for the reported quarter came in at $623 million.
Liquidity
FedEx exited first-quarter fiscal 2026 with cash and cash equivalents of $6.16 billion compared with $5.50 billion at the end of the prior quarter. Long-term debt (less current portion) was $20.2 billion compared with $19.1 billion at the end of the prior quarter.
FedEx completed $500 million in share repurchases during the reported quarter. As of Aug 31, 2025, FDX had $1.6 billion available for repurchases under its 2024 stock repurchase authorization.
Outlook
For the full year fiscal 2026, FedEx expects revenue growth in the range of 4-6% on a year-over-year basis. The effective tax rate (ETR) is estimated at around 25%. Pension contributions are now expected to be up to $400 million compared with the prior view of $600 million.
Diluted earnings per share (EPS) are anticipated between $14.20 and $16.00 before the MTM retirement plans accounting adjustments, and after excluding costs related to business optimization initiatives, the planned spin-off of FedEx Freight, and the planned change in the company's fiscal year end, EPS is expected between $17.20 and $19.00.
For full-year fiscal 2026, FedEx continues to anticipate permanent cost reductions of $1 billion in transformation-related savings from structural cost reductions and the advancement of Network 2.0. FDX anticipates capital spending of $4.5 billion, prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation.
Currently, FDX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Latest Earnings Results of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs.
Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year.
Total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT’s second-quarter revenue performance witnessed a 6% increase in Intermodal (JBI) loads, a 13% increase in Truckload (JBT) loads, a 3% increase in Dedicated Contract Services (DCS) productivity and a 6% increase in Integrated Capacity Solutions (ICS) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenue, increased 1% on a year-over-year basis.
United Airlines Holdings, Inc. (UAL - Free Report) reported mixed second-quarter 2025 results wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.
UAL's second-quarter 2025 adjusted earnings per share of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25.
Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year.