FedEx Corp (NYSE:FDX, XETRA:FDX) reported higher earnings and revenue for its fiscal second quarter ended November 30, and raised its full-year fiscal 2026 outlook.
The parcel delivery company posted revenue of $23.5 billion, up from $22 billion a year earlier and above Wall Street estimates of about $22.85 billion.
Net income rose to $960 million, or $4.04 per diluted share, compared with $740 million, or $3.03 per share, a year ago. On an adjusted basis, diluted earnings per share increased to $4.82 from $4.05, exceeding consensus expectations of roughly $4.11.
Operating income improved to $1.38 billion on a reported basis and $1.61 billion on an adjusted basis, with operating margin rising year over year.
FedEx said its results reflected strength in US domestic and International Priority package yields, higher US domestic package volume, and continued structural cost reductions.
By segment, Federal Express operating results improved, driven by higher yields and cost savings from transformation initiatives, partially offset by higher wages, increased purchased transportation rates, global trade policy impacts, and the grounding of the MD-11 aircraft fleet.
FedEx Freight operating results declined due to lower shipments and higher wage costs, partly offset by increased yield. The Freight segment incurred $152 million in one-time spin-off-related costs during the quarter.
FedEx reiterated it remains on track to spin off FedEx Freight on June 1, 2026.
The company raised its full-year adjusted earnings outlook to a range of about $17.80 to $19 per share, from a prior range of $17.20 to $19.
Shares fell in premarket trading despite the earnings beat, as investors focused on near-term headwinds highlighted in management’s commentary and guidance.
FedEx said the grounding of its MD-11 aircraft fleet reduced second-quarter operating income by about $25 million and is expected to result in significantly higher incremental costs in the third quarter, leading to lower sequential earnings.
The company also pointed to continued weakness in FedEx Freight, where demand remains soft. FedEx now expects freight revenue to be flat to slightly down for the full year, with up to roughly $300 million of drag on adjusted operating income, including costs related to the planned spin-off.
Shares of FedEx were down 2.6% at about $280 in early trade on Friday.