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FedEx reported Q3 EPS of $5.25, beating estimates and rising 16.4% year over year.
FDX raised FY26 EPS outlook and now expects revenue growth of 6-6.5% year over year.
Strong package yields, cost cuts, and higher U.S. domestic volumes drove growth.
FedEx Corporation (FDX - Free Report) reported solid fiscal third-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 84 cents from non-recurring items) of $5.25 per share beat the Zacks Consensus Estimate of $4.14 and improved 16.4% year over year.
Revenues of $24.0 billion came ahead of the Zacks Consensus Estimate of $23.5 billion and improved 8.3% from the year-ago fiscal quarter’s reported figure.
Apart from the better-than-expected results, FDX has also raised its full-year fiscal 2026 guidance for revenues and earnings. For fiscal 2026, FedEx now expects revenue growth in the range of 6-6.5% on a year-over-year basis (prior view: up 5-6%). Diluted earnings per share (EPS) are now anticipated to be between $16.05 and $16.85 before the MTM retirement plans accounting adjustments compared with the prior guidance of $14.80-$16.00. EPS, 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, is now expected to be between $19.30 and $20.10 compared with the prior guided range of $17.80 to $19.00.
FedEx Corporation Price, Consensus and EPS Surprise
Operating income, on a reported basis, increased 4% to $1.35 billion from the year-ago fiscal quarter’s reported number. Operating margin fell to 5.6% from 5.8% in the year-ago reported quarter. Operating results improved in the third quarter on the back of strength in U.S. domestic and International Priority package yields, continued structural cost reductions and higher U.S. domestic package volume.
Operating expenses (reported basis) increased 9% year over year to $22.6 billion.
Raj Subramaniam, FDX president and chief executive officer, stated, “Team FedEx delivered another quarter of strong financial results and excellent service for our customers, powered by disciplined operational execution, the resilience of our global network, and the accelerating impact of our advanced digital solutions. We are the industrial network that powers the global economy, and our network and digital transformation is enabling us to make supply chains smarter for everyone. Our strategy not only strengthens our operations but also drives robust free cash flow, positioning FedEx to deliver durable, long-term value for stockholders.”
The planned spin-off of FedEx Freight into a new publicly traded company is on track for June 1, 2026. On Feb. 5, 2026, FedEx Freight completed the issuance of $3.7 billion of senior notes. FedEx Freight plans to distribute the net proceeds from the offering of the notes to FedEx as part of the consideration for FedEx’s contribution of assets to FedEx Freight in connection with the spin-off.
FedEx Freight will host an Investor Day in New York City on April 8, 2026.
Segmental Performance During the Quarter
FedEx Express segment’s revenues grew 10% year over year to $21.1 billion. The Federal Express segment benefited from higher U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives and increased U.S. domestic package volume. These factors were partially offset by higher variable incentive compensation expenses and wage rates, the financial impacts of global trade policy changes, increased purchased transportation rates and the MD-11 groundings.
FedEx Freight revenues fell 5% from the year-ago fiscal quarter’s reported figure to $1.99 billion. FedEx Freight segment was weighed down byincreased costs associated with the company's planned spin-off, lower shipments and higher wage rates, partially offset by increased yield.
Average daily shipments fell 6% year over year. Capital expenditures for the reported quarter were $955 million.
Liquidity
FedEx exited third-quarter fiscal 2026 with cash and cash equivalents of $8.01 billion compared with $6.57 billion at the end of the prior quarter. Long-term debt (less current portion) was $22.8 billion compared with $20.2 billion at the prior-quarter end.
Remaining Aspects of 2026 Outlook
Pension contributions are still expected to be up to $275 million.
For fiscal 2026, FedEx now anticipates permanent cost reductions of more than $1 billion (prior view: $1 billion) in transformation-related savings from structural cost reductions and the advancement of Network 2.0. FDX anticipates capital spending of $4.1 billion (prior view: $4.5 billion), prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation. The effective tax rate is now estimated to be around 24% compared with the prior expectation of 25%.
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.
Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported fourth-quarter 2025 earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate of $1.81 and improved 24.2% year over year.
Total operating revenues of $3.09 billion lagged the Zacks Consensus Estimate of $3.12 billion and were down 1.6% year over year. JBHT’s fourth-quarter revenue performance was hurt by a 2% and 4% decline in revenue per load excluding fuel surcharge revenue in Intermodal (JBI) and Truckload (JBT), respectively, a 1% decrease in average trucks in Dedicated Contract Services (DCS), and a 7% and 2% decline in load volume in Integrated Capacity Solutions (ICS) and JBI, respectively. The decrease in revenue, excluding fuel surcharge revenue, was partially offset by a 15% increase in volume in JBT, a 1% uptick in productivity, excluding fuel surcharge revenue, in DCS, and an increase in revenue per load in ICS. Total operating revenue, excluding fuel surcharge revenue, decreased 2% year over year.
United Airlines Holdings, Inc. (UAL - Free Report) reported solid fourth-quarter 2025 results, wherein the company’s earnings and revenues beat the Zacks Consensus Estimate.
UAL's fourth-quarter 2025 adjusted earnings per share (excluding 9 cents from non-recurring items) of $3.10 surpassed the Zacks Consensus Estimate of $2.98 but declined 4.9% on a year-over-year basis. The reported figure lies within the guided range of $3.00-$3.50.
Operating revenues of $15.4 billion outpaced the Zacks Consensus Estimate marginally by 0.1% and increased 4.8% year over year. Passenger revenues (which accounted for 90.4% of the top line) increased 4.9% year over year to $13.9 billion. UAL flights transported 45,679 passengers in the fourth quarter, up 3% year over year. Cargo revenues fell 6% year over year to $490 million. Revenues from other sources rose 9.1% year over year to $981 million.
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FedEx Q3 Earnings & Revenues Beat Estimates, FY26 EPS View Raised
Key Takeaways
FedEx Corporation (FDX - Free Report) reported solid fiscal third-quarter 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 84 cents from non-recurring items) of $5.25 per share beat the Zacks Consensus Estimate of $4.14 and improved 16.4% year over year.
Revenues of $24.0 billion came ahead of the Zacks Consensus Estimate of $23.5 billion and improved 8.3% from the year-ago fiscal quarter’s reported figure.
Apart from the better-than-expected results, FDX has also raised its full-year fiscal 2026 guidance for revenues and earnings. For fiscal 2026, FedEx now expects revenue growth in the range of 6-6.5% on a year-over-year basis (prior view: up 5-6%). Diluted earnings per share (EPS) are now anticipated to be between $16.05 and $16.85 before the MTM retirement plans accounting adjustments compared with the prior guidance of $14.80-$16.00. EPS, 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, is now expected to be between $19.30 and $20.10 compared with the prior guided range of $17.80 to $19.00.
FedEx Corporation Price, Consensus and EPS Surprise
FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote
Operating income, on a reported basis, increased 4% to $1.35 billion from the year-ago fiscal quarter’s reported number. Operating margin fell to 5.6% from 5.8% in the year-ago reported quarter. Operating results improved in the third quarter on the back of strength in U.S. domestic and International Priority package yields, continued structural cost reductions and higher U.S. domestic package volume.
Operating expenses (reported basis) increased 9% year over year to $22.6 billion.
Raj Subramaniam, FDX president and chief executive officer, stated, “Team FedEx delivered another quarter of strong financial results and excellent service for our customers, powered by disciplined operational execution, the resilience of our global network, and the accelerating impact of our advanced digital solutions. We are the industrial network that powers the global economy, and our network and digital transformation is enabling us to make supply chains smarter for everyone. Our strategy not only strengthens our operations but also drives robust free cash flow, positioning FedEx to deliver durable, long-term value for stockholders.”
The planned spin-off of FedEx Freight into a new publicly traded company is on track for June 1, 2026. On Feb. 5, 2026, FedEx Freight completed the issuance of $3.7 billion of senior notes. FedEx Freight plans to distribute the net proceeds from the offering of the notes to FedEx as part of the consideration for FedEx’s contribution of assets to FedEx Freight in connection with the spin-off.
FedEx Freight will host an Investor Day in New York City on April 8, 2026.
Segmental Performance During the Quarter
FedEx Express segment’s revenues grew 10% year over year to $21.1 billion. The Federal Express segment benefited from higher U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives and increased U.S. domestic package volume. These factors were partially offset by higher variable incentive compensation expenses and wage rates, the financial impacts of global trade policy changes, increased purchased transportation rates and the MD-11 groundings.
FedEx Freight revenues fell 5% from the year-ago fiscal quarter’s reported figure to $1.99 billion. FedEx Freight segment was weighed down byincreased costs associated with the company's planned spin-off, lower shipments and higher wage rates, partially offset by increased yield.
Average daily shipments fell 6% year over year. Capital expenditures for the reported quarter were $955 million.
Liquidity
FedEx exited third-quarter fiscal 2026 with cash and cash equivalents of $8.01 billion compared with $6.57 billion at the end of the prior quarter. Long-term debt (less current portion) was $22.8 billion compared with $20.2 billion at the prior-quarter end.
Remaining Aspects of 2026 Outlook
Pension contributions are still expected to be up to $275 million.
For fiscal 2026, FedEx now anticipates permanent cost reductions of more than $1 billion (prior view: $1 billion) in transformation-related savings from structural cost reductions and the advancement of Network 2.0. FDX anticipates capital spending of $4.1 billion (prior view: $4.5 billion), prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation. The effective tax rate is now estimated to be around 24% compared with the prior expectation of 25%.
Currently, FDX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q4 Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported fourth-quarter 2025 earnings (excluding 31 cents from non-recurring items) of $1.55 per share, which beat the Zacks Consensus Estimate of $1.53. Earnings decreased 16.22% on a year-over-year basis due to high labor costs.
Revenues in the December-end quarter were $16 billion, beating the Zacks Consensus Estimate of $15.63 billion and increasing 2.9% on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1.2% year over year to $14.6 billion. Revenue growth was impacted by about 2 points due to the government shutdown, mainly in the domestic segment, consistent with the company's disclosure last month.
J.B. Hunt Transport Services, Inc. (JBHT - Free Report) reported fourth-quarter 2025 earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate of $1.81 and improved 24.2% year over year.
Total operating revenues of $3.09 billion lagged the Zacks Consensus Estimate of $3.12 billion and were down 1.6% year over year. JBHT’s fourth-quarter revenue performance was hurt by a 2% and 4% decline in revenue per load excluding fuel surcharge revenue in Intermodal (JBI) and Truckload (JBT), respectively, a 1% decrease in average trucks in Dedicated Contract Services (DCS), and a 7% and 2% decline in load volume in Integrated Capacity Solutions (ICS) and JBI, respectively. The decrease in revenue, excluding fuel surcharge revenue, was partially offset by a 15% increase in volume in JBT, a 1% uptick in productivity, excluding fuel surcharge revenue, in DCS, and an increase in revenue per load in ICS. Total operating revenue, excluding fuel surcharge revenue, decreased 2% year over year.
United Airlines Holdings, Inc. (UAL - Free Report) reported solid fourth-quarter 2025 results, wherein the company’s earnings and revenues beat the Zacks Consensus Estimate.
UAL's fourth-quarter 2025 adjusted earnings per share (excluding 9 cents from non-recurring items) of $3.10 surpassed the Zacks Consensus Estimate of $2.98 but declined 4.9% on a year-over-year basis. The reported figure lies within the guided range of $3.00-$3.50.
Operating revenues of $15.4 billion outpaced the Zacks Consensus Estimate marginally by 0.1% and increased 4.8% year over year. Passenger revenues (which accounted for 90.4% of the top line) increased 4.9% year over year to $13.9 billion. UAL flights transported 45,679 passengers in the fourth quarter, up 3% year over year. Cargo revenues fell 6% year over year to $490 million. Revenues from other sources rose 9.1% year over year to $981 million.