FedEx Q2 Earnings & Revenues Beat Estimates, Up Y/Y, FY26 EPS View Up

FedEx Corporation FDX reported solid second-quarter fiscal 2026 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Quarterly earnings (excluding 78 cents from non-recurring items) of $4.82 per share beat the Zacks Consensus Estimate of $4.07 as well as improved 19% year over year. Share repurchases boosted fiscal second-quarter earnings by 5 cents per share.

Revenues of $23.4 billion came ahead of the Zacks Consensus Estimate of $22.8 billion and improved 6.8% from the year-ago fiscal quarter’s reported figure.

Apart from the better-than-expected results, FDX has also raised its full-year fiscal 2026 guidance for revenues and earnings. For the full year fiscal 2026, FedEx now expects revenue growth in the range of 5-6% on a year-over-year basis (prior view: up 4-6%). Diluted earnings per share (EPS) are now anticipated between $14.80 and $16.00 before the MTM retirement plans accounting adjustments, compared with the prior guidance of $14.20-$16.00. 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 $17.80 and $19.00 compared with the prior guided range of $17.20 to $19.00.

Operating income, on a reported basis, increased 31.4% to $1.38 billion from the year-ago fiscal quarter’s reported number. Operating margin rose to 5.9% from 4.8% in the year-ago reported quarter. Operating results improved in the second quarter on the back of strength in U.S. domestic and International Priority package yields, continued structural cost reductions and higher U.S. domestic package volume.

Operating expenses (reported basis) increased by 6% to $22.1 billion.

FedEx Corporation Price, Consensus and EPS Surprise

FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote

Raj Subramaniam, FDX president and chief executive officer, stated, “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. I am extremely proud of our team members worldwide for their commitment to make every FedEx experience outstanding this Peak season.”

The planned spin-off of FedEx Freight into a new publicly traded company continues to advance and is anticipated to be completed in a tax-efficient manner for FedEx shareholders on June 1, 2026. Once completed, FedEx Freight will operate as a separately traded public company, listed on the New York Stock Exchange under the ticker symbol FDXF.

Segmental Performance During the Quarter

FedEx Express segment’s revenues grew 8% year over year to $20.4 billion (higher than our model estimate of $19.7 billion). The Federal Express segment benefited from higher U.S. domestic and International Priority package yields, continued cost savings from transformation initiatives, lower business optimization costs and increased U.S. domestic package volume. These factors were partially offset by the financial impact of global trade policy changes, higher wage rates and variable incentive compensation expenses, increased purchased transportation rates, and the grounding of the MD11 aircraft fleet.

FedEx Freight revenues fell 2% from the year-ago fiscal quarter’s reported figure to $2.14 billion (lower than our model estimate figure of $2.24 billion). FedEx Freight segment was weighed down by lower shipments, higher wage rates, and the hiring of additional dedicated LTL sales professionals in preparation for the company’s spin-off, partially offset by increased yield. FedEx Freight incurred one-time spin-off-related costs of $152 million during the reported quarter.

Average daily shipments fell 4% year over year. Capital expenditures for the reported quarter came in at $757 million.

Liquidity

FedEx exited second-quarter fiscal 2026 with cash and cash equivalents of $6.57 billion compared with $6.16 billion at the end of the prior quarter. Long-term debt (less current portion) of $20.2 billion was flat sequentially.

FedEx completed $276 million in share repurchases via open market transactions during the reported quarter. As of Nov. 30, 2025, FDX had $1.3 billion available for repurchases under its 2024 stock repurchase authorization.

Remaining Aspects of 2026 Outlook

Pension contributions are now expected to be up to $275 million compared with the prior view of $400 million.

For full-year fiscal 2026, FedEx continues to anticipate permanent cost reductions of $1 billion in transformation-related savings from structural cost reductions and the advancement of Network 2.0. FDX anticipates capital spending of $4.5 billion, prioritizing investments in network optimization and efficiency improvement, which includes fleet and facility modernization and automation. The effective tax rate (ETR) is still estimated at around 25%.

Currently, FDX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Q3 Performances of Other Transportation Companies

Delta Air Lines DAL reported third-quarter 2025 earnings (excluding 46 cents from non-recurring items) of $1.71 per share, which beat the Zacks Consensus Estimate of $1.52. Earnings increased 14% on a year-over-year basis due to low fuel costs.

Revenues in the September-end quarter were $16.67 billion, beating the Zacks Consensus Estimate of $15.79 billion and increasing 6.4% on a year-over-year basis. Due to improving air-travel demand, adjusted operating revenues (excluding third-party refinery sales) increased 4.1% year over year to $15.2 billion. 

J.B. Hunt Transport Services, Inc. (JBHT) reported third-quarter 2025 earnings of $1.76 per share, which surpassed the Zacks Consensus Estimate of $1.47 and improved 18.1% year over year.

Total operating revenues of $3.05 billion surpassed the Zacks Consensus Estimate of $3.02 billion and were down 0.5% year over year. JBHT’s third-quarter revenue performance was hurt by a 1% and 4% decline in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decrease in load volume of 8% and 1% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS), and 8% fewer stops in Final Mile Services (FMS). These items were partially offset by a 3 % improvement in DCS productivity, a 9% increase in revenue per load in ICS and 14% load growth in JBT. Total operating revenues, excluding fuel surcharge revenue, fell less than 1% year over year.

United Airlines Holdings, Inc. (UAL) reported mixed third-quarter 2025 results wherein the company’s earnings beat the Zacks Consensus Estimate, but revenues missed the same.

UAL's third-quarter 2025 adjusted earnings per share (EPS) (excluding 12 cents from non-recurring items) of $2.78 surpassed the Zacks Consensus Estimate of $2.64 but declined 16.5% on a year-over-year basis. The reported figure lies above the guided range of $2.25 and $2.75.

Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.3 billion but increased 2.6% year over year. Passenger revenues (which accounted for 90.7% of the top line) increased 1.9% year over year to $13.8 billion. UAL flights transported 48,382 passengers in the third quarter, up 6.2% year over year.

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