FedEx (FDX) shares fell early Wednesday after the company provided a calendar-year earnings outlook below Wall Street's estimates for 2026, even though the parcel delivery giant recorded an unexpected annual increase in its fiscal fourth-quarter bottom line.
Per-share adjusted earnings from continuing operations are anticipated to come in between $16.90 and $18.10 for the current calendar year, the company said late Tuesday. The guidance excludes costs related to the group's optimization efforts and the separation of its freight business, as well as expenses associated with its decision to shift its full-year reporting cycle to the end of December from May 31, effective June 1.
The current consensus on FactSet is for non-GAAP EPS of $22.41. FedEx's stock fell nearly 7% in the most recent premarket activity.
Revenue is pegged to grow by 11% for 2026, including three percentage points of assumed fuel-price driven surcharge benefit. "We expect this outlook to be supported by continued momentum within base pricing and increased demand for premium (business-to-business) and high-value (business-to-consumer) services," interim Chief Financial Officer Claude Russ said during an earnings call, according to a FactSet transcript. The Street is looking for $90.43 billion.
"We expect the revenue trends we saw in (the fourth quarter of fiscal 2026) to continue into the first four months of our June through December transition year, with US domestic growth rate decelerating as we continue to lap last year's strong trends," according to Russ. "We expect both US domestic and international profits to improve year over year in the transition period."
For the three-month period through May, FedEx's adjusted EPS rose to $6.31 from $6.07 the year before, defying the average analyst estimate for a decline to $5.96. Revenue improved 13% to $25.01 billion, above the Street's view for $24.04 billion.
"Our results demonstrate that we are growing revenue in the most premium segments of the global economy," Chief Executive Rajesh Subramaniam said during the call. "What also stands out is that we achieved these results despite several significant headwinds, particularly global trade policy changes and the grounding of our MD-11 aircraft fleet."
FedEx and United Parcel Services (UPS) reportedly grounded their combined fleet of more than 50 McDonnell Douglas MD-11 airplanes in November, following a deadly crash.
Revenue in the express segment inclined 14% to $21.57 billion, buoyed by higher US domestic and international priority package yields and increased US domestic package and international export volume, according to an earnings presentation. The freight segment saw revenue increase 5% to $2.41 billion.
FedEx recently completed the planned separation of the freight division into a new publicly traded company.
"With the successful spin-off of FedEx freight, we are entering this next chapter positioned to grow while further optimizing our network, lowering our cost to serve, creating meaningful long-term value, and driving robust free cash flow," Subramaniam said in the earnings release.
