Investing.com -- FedEx Corporation (NYSE: FDX) on Thursday reported third-quarter results ahead of Wall Street expectations, driven by improved package yields, steady U.S. demand and ongoing cost-cutting efforts, while lifting its full-year profit forecast.

Shares of the parcel giant were up 3% in extended trading after its adjusted earnings per share of $5.25 for the quarter, topped analysts’ estimates of $4.11. Revenue came in at $24 billion, compared with expectations of $23.48 billion.

The company raised its fiscal 2026 EPS outlook to $19.30–$20.10, above the consensus estimate of $18.71 and its prior forecast range of $17.80–$19.00 issued in December.

It now expects annual revenue growth of 6.0% to 6.5%, higher than its earlier projection of 5% to 6%.

FedEx said performance was supported by higher U.S. domestic and international priority package yields, increased domestic volumes and continued savings from its multi-year restructuring program, including the integration of its Express and Ground networks under its “Network 2.0” initiative.

Operating income improved in the quarter, aided by structural cost reductions and pricing gains, though margins faced pressure from higher wages, incentive compensation and rising transportation costs. The company also cited headwinds from global trade policy changes. Additional costs stemmed from the temporary grounding of its MD-11 cargo fleet following a fatal cargo plane crash in November 2025. FedEx said it incurred millions in replacement costs for aircraft and trucking capacity but expects the fleet to return to service by the end of May.

The Federal Express segment saw improved profitability on stronger yields and volumes, while the Freight segment posted weaker results due to lower shipments, higher wage costs and expenses tied to its planned spin-off.

FedEx also disclosed a planned minority investment in InPost as part of a consortium-led take-private deal, which it expects to be accretive to earnings in its first year.

FedEx is separating its Freight less-than-truckload (LTL) business by June 1, 2026. The unit recently issued $3.7 billion in senior notes.