FedEx Posts Higher Earnings as Spinoff Plans Advance
Revenue and Profit Rise in Q2 2026 as Freight Separation Nears
Key Takeaways:
- FedEx reported higher revenue and earnings for its fiscal second quarter ended Nov. 30, posting net income of $956 million on revenue of $23.5 billion, up 6.8% year over year.
- Results were near Wall Street expectations as FedEx Express revenue rose 8% with operating income up 47%, while FedEx Freight revenue fell 2% and operating income dropped 71%.
- The company said its planned FedEx Freight spinoff remains on track for a tax-efficient separation by June 1, with an investor day scheduled April 8.
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FedEx Corp. reported Dec. 18 an increase in revenue and earnings in its as executives continued to pursue the planned spinoff of FedEx Freight.
The Memphis, Tenn.-based transportation services company posted net income of $956 million, or $4.04 a diluted share, for the three months ending Nov. 30. That compared with $741 million, $3.03, during the same time the previous year. Total revenue increased 6.8% to $23.5 billion from $22 billion.
“FedEx delivered an outstanding second quarter as we successfully executed our growth strategy and advanced our network transformation while navigating a highly challenging external environment,” FedEx CEO Raj Subramaniam said. “I am extremely proud of our team members worldwide for their commitment to make every FedEx experience outstanding this peak season.”
The FedEx Freight separation was highlighted in the report as being on track. The plan is to spin off those operations into a new publicly traded company. The earnings report promised shareholders that the plan is expected to be achieved in a tax-efficient manner by June 1. FedEx Freight also plans to host an investor day in New York City on April 8.
The results hovered around expectations by investment analysts on Wall Street, which had been looking for $4.07 per share and quarterly revenue of $22.88 billion, according to Zacks Consensus Estimate.
FedEx Express segment revenue increased 8% to $20.4 billion from $18.8 billion during the same time last year. Operating income increased 47% to $1.55 billion from $1.05 billion. The operating improvement was driven by higher domestic and international priority package yields, continued cost savings from transformation initiatives, lower business optimization costs and increased domestic package volume. This was partially offset by the financial impact of global trade policy changes, higher wage rates and other issues.
FedEx Freight segment revenue decreased 2% to $2.14 billion from $2.18 billion. Operating income decreased 71% to $90 million from $312 million. The operating results decreased during the quarter due to lower shipments, higher wage rates and the hiring of additional dedicated less-than-truckload sales professionals in preparation for the spinoff.
RELATED: FedEx Freight Completes Executive Team With New CFO Witt
FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 3 on the TT Top 50 list of the largest global freight carriers. FedEx Logistics ranks No. 43 on the TT Top 100 logistics companies list.
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