FedEx Shares Down 7% On Weak Q4 Profit, Adj. Margin, Despite Positive Outlook

(RTTNews) - Shares of FedEx Corp. were losing around 7 percent in the pre-markt activity on the NYSE after the logistics major reported weak earnings and adjusted operating margin for the fourth quarter, even as revenues were higher. Looking ahead, the firm projects continued revenue and earnings growth momentum in June-through-December transition year. For calendar year 2026, the company expects higher earnings and revenues.

Raj Subramaniam, FedEx Corp. president and chief executive officer, stated, "Our profitable growth strategy is working. We are building momentum across our global industrial network, driving structural improvements and winning in high-value growth markets. With the successful spin-off of FedEx Freight, we are entering this next chapter positioned to grow while further optimizing our network, lowering our cost to serve, creating meaningful long-term value, and driving robust free cash flow."

Beginning June 1, FedEx's fiscal year end has been shifted to December 31 from May 31, and the results would reflect FedEx Freight as discontinued operations following its spin-off into a new publicly traded company.

For calendar year 2026, FedEx expects earnings per share from continuing operations of $16.55 to $17.75 and adjusted earnings per share from continuing operations of $16.90 to $18.10, with revenue growth of around 11 percent year-over-year.

In Calendar 2025, earnings per share from continuing operations were $14.80 and adjusted earnings per share from continuing operations were $15.00.

For calendar 2026, FedEx said it remains committed to returning capital to stockholders, including the previously announced 5 percent increase in the annual dividend, after adjusting for the FedEx Freight spin-off.

The company also intends to repurchase up to $1 billion worth of shares opportunistically.

As of May 31, $1.3 billion remained under the company's 2024 stock repurchase authorization.

In the fourth quarter, the company's bottom line totaled $1.60 billion or $6.60 per share, lower than $1.65 billion or $6.88 per share last year.

Adjusted earnings were $1.53 billion or $6.31 per share for the period, compared to $1.46 billion or $6.07 per share a year ago.

Operating income declined year-over-year, while adjusted operating income grew to $2.09 billion from last year's $2.02 billion, mainly reflecting continued strength in U.S. Domestic and International Priority package yields, along with cost savings from transformation initiatives, and increased U.S. domestic and international export package volume.

Meanwhile, adjusted operating margin dropped to 8.4 percent from 9.1 percent a year earlier.

The company's revenue for the period rose 12.6 percent to $25.0 billion from $22.2 billion last year.

In pre-market activity on the NYSE, the shares were losing around 7.3 oercent, trading at $293.73, extending the 3.5 percent drop on Tuesday's regular trading.

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