FedEx reported better-than-expected quarterly profits on Tuesday and projected around 11% revenue growth for 2026 — but that wasn’t enough to satisfy investors, as shares slid 5.7% in after-hours trading following a margin decline in its main express division.
The shipping company also issued an earnings-per-share forecast of $16.90 to $18.10 for the year. The company is in the process of shifting its fiscal year to align with the standard calendar year, moving away from its previous May year-end. Analysts have not yet developed financial models that allow for direct comparisons with the new projection.
The announcement comes on the heels of the June 1 spinoff of its freight trucking division, FedEx Freight — a move that is part of a longer-term strategy to simplify operations and reduce costs.
FedEx and competitor UPS are both dealing with the shifting landscape of U.S. trade policy, including the elimination of duty-free treatment for low-value e-commerce packages — known as “de minimis” shipments — from China-linked discount retailers such as Shein and Temu. That change has put downward pressure on overall shipping volumes.
The company’s fourth-quarter adjusted profit came in at $6.31 per share, topping the analyst consensus estimate of $5.96, according to data from LSEG. However, the operating margin at its core Federal Express segment slipped to 7.7%, down from 8.4% in the same period a year ago, as costs related to employees, outsourced transportation, and fuel all increased.
Quarterly revenue climbed 12.6% to $25 billion, surpassing analyst expectations of $24.04 billion, driven largely by solid domestic demand.
FedEx also said it plans to repurchase up to $1 billion worth of its own shares in 2026.
While the quarterly results still include figures from the freight trucking business that was recently spun off, Wall Street’s attention is primarily on the package delivery side of the business. That segment is seeing continued softness in standard e-commerce shipping, even as demand grows in the premium, overnight delivery market.
FedEx’s core express segment posted a 14% increase in revenue during the quarter, while the freight trucking unit recorded 5% revenue growth.
“Federal Express segment operating results improved during the quarter, driven by higher U.S. domestic and International Priority package yields,” the company stated in an official release.
