FedEx $FDX reported fiscal fourth-quarter earnings on Tuesday that beat Wall Street estimates on both the top and bottom lines. But FedEx stock fell roughly 6% in after-hours trading Tuesday as investors reacted to a forward profit outlook that came in below expectations.
On the bottom line, the quarter produced adjusted EPS of $6.31, topping the $5.96 consensus estimate tracked by CNBC. Sales of $25.01 billion represented a 13% year-over-year gain and cleared the $24.04 billion Wall Street target.
Full-year revenue reached $94.7 billion, a jump from $87.9 billion twelve months earlier, while adjusted diluted EPS of $20.24 came in above the $19.30-to-$20.10 range the company had previously set as its target.
For calendar year 2026 — reflecting FedEx's shift to a December fiscal year-end — the company said it expects roughly 11% revenue growth and adjusted diluted earnings per share of $16.90 to $18.10. That forecast covers only continuing operations and excludes the recently spun-off FedEx Freight business. The new earnings target was "slightly below expectations, giving management room to raise guidance depending on how the year progresses," according to Bloomberg, which attributed the stock pressure in part to that gap.
Results for the period also captured the freight division for the final time before its exit from the consolidated company. As part of the June 1 separation, FedEx Freight became an independently traded entity and transferred a cash dividend of about $4.1 billion back to FedEx Corporation.
Profitability in the Federal Express segment — now FedEx's primary operation — compressed year over year, with the operating margin retreating to 7.7% from 8.4%, pressured by higher wage and benefits expenses, rising purchased transportation costs, and increased fuel spending. The company's fuel bill reached $1.43 billion for the quarter, nearly double the $864 million recorded a year earlier — a 66% increase. The company also noted that the grounding of its MD-11 cargo jet fleet and global trade policy changes were headwinds during the period.
"Team FedEx delivered an impressive finish to a strong fiscal year," CEO Raj Subramaniam said in a statement. On the analyst call, Interim CFO Claude Russ indicated that easing compensation headwinds would help lift margins in coming periods, Reuters reported.
FedEx also said it plans to repurchase up to $1 billion in stock during calendar 2026 and raised its annual dividend by 5%, after adjusting for the freight spin-off.