FedEx delivers
What’s happening:-
Shares of FedEx Corp surged in after-hours trading on Thursday, following the release of the company’s results for the first quarter of fiscal 2026.
What happened:-
The shipping giant reported better-than-expected sales and earnings for the latest quarter.
FedEx also reinstated its guidance for the full year, providing a boost to its stock during the extended trading session.
How were the results:-
The Memphis, Tennessee-based company reported a low single-digit gain in revenue for its first quarter ended August 31.
Revenue rose almost 3% to $22.2 billion, topping Wall Street expectations of $21.67 billion.
Adjusted earnings climbed to $3.83 per share, from $3.60 per share in the year-ago quarter, beating consensus estimates of $3.62 per share.
FedEx
Why it matters:-
Shares of FedEx had lost around 20% year to date before the release of the earnings report on Thursday, as the company suspended its forecast in June amid concerns around higher tariffs weighing on consumer spending and, in turn, shipping demand. Rival shipper United Parcel Service (UPS) had also held off on issuing its full-year guidance in July.
The company indicated that global tariffs had impacted its first-quarter revenues by $150 million, an impact that is expected to repeat every quarter this year. This, combined with other trade policies represent a revenue headwind of as much as $1 billion for the year, FedEx’s Chief Customer Officer said.
Against this backdrop, FedEx has been working on its cost-cutting plan, which targets $1 billion in cost savings by May 2026. The initiatives include closing facilities, grounding planes, and merging some of its units.
FedEx services
FedEx’s total international average daily export volume declined 3% in the quarter, while overall average daily volume (including domestic parcels) climbed 4%. Revenue per package grew by 2%.
The Federal Express division recorded an improvement in operating results in the latest quarter, following a rise in domestic and international priority package yields and higher domestic package volumes.
The Freight division’s profitability was hit by a decline in revenue, higher wage rates and more hiring of dedicated LTL sales professionals. The company also said that its planned FedEx Freight spinoff is projected to be executed by June 2026.
FedEx guided to revenue growth of 4%-6% and adjusted earnings of $17.20-$19.00 per share for fiscal 2026.
How shares responded:-
FedEx’s shares rose 5.5% to $238.91 in the after-hours trading session on Thursday following the release of quarterly results. The company’s stock has lost around 8% over the past six months.
What to watch: Investors will continue monitoring the company’s cost cutting plan and any tariff related announcement from the government.
FedEx Express
FedEx is an American multinational corporation that specializes in express mail, delivery, and shipping services, and provides shipment and parcel transportation services to various addresses around the world using its global ground and air network.The company offers a wide range of services, including express delivery of time-sensitive shipments, large freight services, and integrated logistics solutions for businesses and individuals, with the ability to track shipments and manage orders online and through dedicated applications.