FedEx Shares Rise on Strong Q2 Earnings and Upbeat Outlook
Logistics giant beats profit and revenue forecasts, raising its full-year guidance on the back of strong package volumes and cost-cutting measures.
FedEx Corp. (NYSE: FDX) shares climbed in trading Wednesday after the company posted fiscal second-quarter results that surpassed analyst expectations and raised its full-year earnings forecast, signaling confidence in its operational strategy amid a dynamic economic landscape.
The stock rose approximately 1.7% to $287.12, trading near its 52-week high. The move came after the Memphis-based logistics leader reported adjusted diluted earnings of $4.82 per share for the quarter, comfortably beating consensus estimates of around $4.07. Revenue came in at $23.5 billion, slightly ahead of the forecasted $23.47 billion and representing a notable increase from the $22.0 billion reported in the same period last year.
The strong performance was driven by a combination of higher U.S. domestic package volume, favorable pricing with strong yields in its U.S. domestic and International Priority segments, and the continued success of its structural cost-reduction programs.
"Our second quarter results demonstrate the successful execution of our growth strategy and network transformation, even in a challenging external environment," said Raj Subramaniam, FedEx Corp. President and CEO, in the company's quarterly earnings statement.
Buoyed by the results, FedEx boosted its outlook for the full fiscal year 2026. The company now projects revenue growth of 5% to 6% year-over-year, tightening the range from its previous forecast of 4% to 6%. More significantly for investors, it raised its adjusted earnings guidance to a range of $17.80 to $19.00 per share, up from the prior forecast of $17.20 to $19.00.
John Dietrich, FedEx's Executive Vice President and CFO, noted that the results and revised outlook reflect growing momentum. "We are confident that our strategic initiatives will continue to create significant value for our stockholders," he stated.
Beyond the headline numbers, the report confirmed that the planned spin-off of the FedEx Freight trucking division is on track for completion by June 1, 2026. This move is part of a broader corporate strategy to streamline operations and unlock further value, with an investor day for the new entity scheduled for April 8, 2026. The company also demonstrated its commitment to returning capital to shareholders, repurchasing $276 million of its common stock during the quarter.
As reported by sources like Nasdaq, the earnings beat provides a positive data point for the global shipping industry, which serves as a key barometer of economic activity. FedEx's ability to drive profitability through both volume growth and efficiency gains suggests resilience and has positioned it favorably as it heads into the crucial second half of its fiscal year.