The Top 5 Analyst Questions From FedEx's Q2 Earnings Call

By Adam Hejl | July 07, 2025, 10:17 AM

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FedEx’s second quarter results were met with a negative reaction from the market, as flat sales and persistent headwinds weighed on sentiment. Management pointed to ongoing challenges in global trade, including the expiration of the U.S. Postal Service contract and recent tariff changes, as key drivers of performance. CEO Raj Subramaniam noted, “Our higher margin B2B volumes remain pressured,” but highlighted the company's operational flexibility and cost-saving initiatives. Domestic parcel growth, especially in consumer-driven segments, partially offset industrial softness, while cost reductions and network optimization continued to support profitability.

Is now the time to buy FDX? Find out in our full research report (it’s free).

FedEx (FDX) Q2 CY2025 Highlights:

  • Revenue: $22.22 billion vs analyst estimates of $21.81 billion (flat year on year, 1.9% beat)
  • Adjusted EPS: $6.07 vs analyst estimates of $5.85 (3.7% beat)
  • Adjusted EBITDA: $3.08 billion vs analyst estimates of $3.02 billion (13.8% margin, 1.8% beat)
  • Revenue Guidance for Q3 CY2025 is $21.79 billion at the midpoint, above analyst estimates of $21.6 billion
  • Adjusted EPS guidance for Q3 CY2025 is $3.70 at the midpoint, below analyst estimates of $4.09
  • Operating Margin: 8.1%, up from 7% in the same quarter last year
  • Market Capitalization: $57.8 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions FedEx’s Q2 Earnings Call

  • Daniel Imbro (Stephens): Asked about the timing and ramp of transformation savings from Drive and Network 2.0. CFO John Dietrich confirmed $200 million expected in Q1 and a gradual ramp throughout the year, emphasizing ongoing cost discipline.
  • Brian Ossenbeck (JPMorgan): Inquired about the improving pricing environment and competitive dynamics. Chief Customer Officer Brie Carere pointed to successful execution of pricing strategies, including fuel surcharges and premium offerings, noting domestic yield improvements in key products.
  • Chris Wetherbee (Wells Fargo): Sought clarification on the breakdown and duration of international trade-related headwinds. Carere explained most impacts stem from China-to-U.S. tariffs and de minimis rule changes, with uncertainty about how long these pressures will persist.
  • Jason Seidl (TD Cowen): Questioned the divergence between B2B and consumer trends. Carere acknowledged continued B2B weakness tied to the industrial economy, while consumer-driven volumes and onboarding in May provided a partial offset.
  • Tom Wadewitz (UBS): Asked for an update on Network 2.0 progress and related cost savings. Dietrich reported the company is on track, with over 100 stations closed and 290 integrated, expecting to remove about 30% of surface facilities by program end.

Catalysts in Upcoming Quarters

In the quarters ahead, our team will be monitoring (1) the pace and scale of cost savings from ongoing transformation initiatives, (2) FedEx’s ability to adjust network capacity in response to trade policy changes and global demand shifts, and (3) signs of recovery in high-margin B2B shipping volumes. Additionally, the impact of the freight spin-off and execution in international growth markets will be important markers for operational and financial progress.

FedEx currently trades at $240.94, up from $229.21 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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