FedEx falls despite beating earnings expectations

Investing.com -- FedEx Corporation (NYSE: FDX) reported first quarter results that exceeded analyst expectations, yet shares fell 3.5% in after-hours trading Wednesday, potentially reflecting concerns over GAAP operating margin performance.

The package delivery company posted adjusted earnings per share of $3.74 for the quarter ended September 30, beating the analyst consensus of $3.31 by $0.43. Revenue reached $22.9 billion, surpassing the $22.81 billion estimate and marking a 12% increase from $20.4 billion in the same quarter last year. However, GAAP operating margin declined to 4.7% from 4.8% in the prior year period, while adjusted operating margin improved to 5.3% from 5.1%.

The company raised its full-year calendar 2026 adjusted EPS guidance to a range of $18.00 to $18.60, with a midpoint of $18.30 that exceeds the analyst consensus of $17.74. FedEx also increased its revenue growth forecast to approximately 12% YoY, up from a prior forecast of approximately 11%.

"As our strong operating results and adjusted free cash flow demonstrate, FedEx is winning across high-value market segments while we optimize our network, driving an increase to our full-year outlook," said Raj Subramaniam, FedEx Corp. president and chief executive officer.

Consolidated operating results improved in the third quarter, driven by increased package base yields, higher package volumes, and continued structural cost reductions from business optimization initiatives. These factors were partially offset by increased purchased transportation rates, higher wage rates and variable compensation expenses, and the financial impact of global trade policy changes.

FedEx completed $2.0 billion in stock repurchases through open market and accelerated share repurchase transactions during June through September, repurchasing approximately 6.3 million shares. As of September 30, $4.3 billion remained available for repurchases under the company's 2026 stock repurchase authorization.

The company completed the spin-off of FedEx Freight on June 1, 2026, retaining a 19.9% ownership interest, and sold FedEx Supply Chain to CMA CGM Group for approximately $1.4 billion on October 1, 2026.

Original Article

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