June 23 (Reuters) – FedEx on Tuesday beat quarterly profit estimates and projected about 11% revenue growth in 2026, but shares fell 5.7% in extended trading after a margin drop in its core express segment.
The delivery giant also forecast earnings per share of $16.90 to $18.10 for the year, as it shifts its fiscal year to align with the calendar year, from its previous May year-end. Analysts have not yet built models that enable comparisons with the new forecast.
This also follows the June 1 spinoff of its freight trucking unit, FedEx Freight – part of its multiyear effort to streamline operations and slash costs.
FedEx and rival UPS are navigating evolving U.S. trade policies, including the end of U.S. duty-free, “de minimis” low-value, e-commerce shipments from major China-linked discount retailers like Shein and Temu, which has weighed on volumes.
While its fourth-quarter adjusted profit of $6.31 topped analysts’ estimate of $5.96, according to data compiled by LSEG, margin at its core Federal Express segment fell to 7.7% from 8.4% the year earlier as employee costs, outsourced transportation costs and fuel climbed.
Quarterly revenue, meanwhile, rose 12.6% to $25 billion, topping expectations of $24.04 billion, helped by strong domestic demand.
FedEx also announced that it would buy back shares worth up to $1 billion in 2026.
The quarterly results include the trucking business FedEx spun off earlier this month, but Wall Street is focused on the performance of its package delivery business, which is experiencing ongoing softness in e-commerce alongside emerging strength in the premium, overnight business.
FedEx’s core express segment reported a 14% rise in revenue, while the freight trucking unit’s revenue grew 5%.
“Federal Express segment operating results improved during the quarter, driven by higher U.S. domestic and International Priority package yields,” the company said in a release.
(Reporting by Nandan Mandayam in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Vijay Kishore)
By Reuters | Reuters | © Copyright Thomson Reuters 2026.
