FedEx CorporationFDX reported solid fourth-quarter fiscal 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 29 cents from non-recurring items) of $6.31 per share beat the Zacks Consensus Estimate of $5.91 as well as improved 3.9% year over year. The company’s bottom line benefited from share repurchase activity.
Revenues of $25.0 billion came ahead of the Zacks Consensus Estimate of $24.1 billion and improved 12.5% from the year-ago fiscal quarter’s reported figure.
FedEx Corporation Price, Consensus and EPS Surprise
FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote
Apart from the better-than-expected results, FDX has also raised its full-year fiscal 2026 guidance for revenues and earnings. For fiscal 2026, FedEx now expects revenue growth to be up almost 11% on a year-over-year basis (prior view: up 6-6.5%). Earnings per share (EPS) are now anticipated to be between $16.55 and $17.75 before the MTM retirement plans accounting adjustments compared with the prior guidance of $16.05-$16.85.
Operating income, on a reported basis, increased 3.4% to $2.09 billion from the year-ago fiscal quarter’s reported number. Operating margin fell to 8.4% from 9.1% in the year-ago reported quarter. Operating income improved in the fiscal fourth quarter on the back of continued strength in U.S. Domestic and International Priority package yields, cost savings from transformation initiatives and increased U.S. domestic and international export package volume.
Operating expenses (reported basis) increased 15% to $23.4 billion.
Raj Subramaniam, FDX president and chief executive officer, stated, “Team FedEx delivered an impressive finish to a strong fiscal year, providing excellent service to our customers and successfully executing on our transformation initiatives. Our- more -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.”
In January 2025, FedEx’s board of directors announced a change in the company’s fiscal year-end from May 31 to Dec. 31. The fiscal year change became effective for the period beginning June 1, 2026.
The spin-off of FedEx Freight into a new publicly traded company was completed on June 1, 2026. In connection with the spin-off, FedEx Freight paid a cash dividend of almost $4.1 billion to FedEx from the proceeds of the $3.7 billion senior notes offering completed in February 2026 and borrowings under its delayed-draw term loan facility.
FedEx Freight will discuss its fiscal fourth-quarter results on June 25, 2026, through a call.
Segmental Performance During the Quarter
FedEx Express segment’s revenues grew 14% year over year to $21.5 billion. The Federal Express segment benefited from higher U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives and increased U.S. domestic and international export package volume. These factors were partially offset by increased purchased transportation and wage rates, higher variable incentive compensation expenses and the financial impacts of global trade policy changes.
FedEx Freight revenues grew 5% from the year-ago fiscal quarter’s reported figure to $2.40 billion.
Average daily shipments fell 6% year over year. Capital expenditures for the reported quarter were $1.47 billion.
Liquidity
FedEx exited fourth-quarter fiscal 2026 with cash and cash equivalents of $13.3 billion compared with $8.01 billion at the end of the prior quarter. Long-term debt (less current portion) was $23.2 billion compared with $22.8 billion at prior-quarter end.
During fiscal 2026, FedEx returned almost $2.2 billion to shareholders, which includes $776 million in the form of share repurchases and $1.4 billion through dividend payments. As of May 31, 2026, $1.3 billion was available under the company's 2024 stock repurchase authorization.
Remaining Aspects of 2026 Outlook
EPS, after excluding costs related to business optimization initiatives, the planned spin-off of FedEx Freight, and the planned change in the company's fiscal year end, is now expected between $16.90 and $18.10 compared with the prior guided range of $19.30 to $20.10.
Pension contributions are now expected to be up to $475 million (prior view: $275 million).
For fiscal 2026, FedEx now anticipates capital spending of $3.9 billion (prior view: $4.1 billion), prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation. The effective tax rate is now estimated to be around 23% compared with the prior expectation of 24%.
For 2026, FedEx remains committed to rewarding its shareholders, which includes the previously announced 5% increase in the annual dividend on its common stock, after adjusting for the FedEx Freight spin-off. FDX also plans to repurchase up to $1 billion worth of shares opportunistically, leveraging continued balance sheet flexibility and free cash flow generation to offset dilution from equity compensation.
Currently, FDX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q1 Performances of Other Transportation Companies
Delta Air Lines (DAL) reported first-quarter 2026 earnings (excluding $1.08 from non-recurring items) of 64 cents per share, which beat the Zacks Consensus Estimate of 61 cents. Earnings increased 39.1% on a year-over-year basis due to high labor costs. Adjusted revenues in the March-end quarter were $14.2 billion, beating the Zacks Consensus Estimate of $14 billion and increasing on a year-over-year basis.
United Airlines Holdings, Inc. (UAL) reported solid first-quarter 2026 results wherein the company’s earnings and revenues beat the Zacks Consensus Estimate as well as improved on a year-over-year basis.
UAL's first-quarter 2026 adjusted earnings per share (EPS) (excluding 95 cents from non-recurring items) of $1.19 surpassed the Zacks Consensus Estimate of $1.08 and increased 30.8% on a year-over-year basis. The reported figure lies within the guided range of $1.00-$1.50.
Operating revenues of $14.6 billion outpaced the Zacks Consensus Estimate of $14.3 billion and increased 10.5% year over year. Passenger revenues (which accounted for 90.1% of the top line) increased 11% year over year to $13.1 billion. UAL flights transported 42,486 passengers in the first quarter, up 4.1% year over year.
Cargo revenues fell 1.6% year over year to $422 million. Revenues from other sources rose 10.5% year over year to $1.02 billion.
J.B. Hunt Transport Services JBHT posted first-quarter 2026 earnings per share of $1.49, up 27% from $1.17 a year ago. The result topped the Zacks Consensus Estimate by $0.04, a 2.8% surprise.
Operating revenues totaled $3.06 billion, rising 4.6% year over year. Revenues beat the consensus mark of $2.94 billion, resulting in a 3.9% surprise, as demand proved resilient across several service offerings, led by Intermodal volume growth and higher revenue per load in select highway-related businesses.
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This article originally published on Zacks Investment Research (zacks.com).