Investing.com -- FedEx Freight on Thursday outlined a stronger earnings outlook for the remainder of 2026 as it begins operating as an independent publicly traded company, despite reporting sharply lower quarterly profit due to separation-related costs, weaker shipment volumes and higher labor expenses.

The less-than-truckload carrier, which completed its spin-off from FedEx Corp. on June 1 and now trades independently, projected revenue growth of 4% to 6% and operating income of $475 million to $515 million for the seven-month transition period ending Dec. 31, 2026. The company also forecast adjusted operating income of $605 million to $645 million and adjusted earnings per share of $2.40 to $2.60, excluding spin-off-related costs.

The guidance comes after the company reported a steep decline in profitability during the fiscal fourth quarter ended May 31. Operating income fell 66.9% to $158 million, while adjusted operating income declined 23.9% to $363 million. Operating margin contracted to 6.6% from 20.8% a year earlier, reflecting planned separation expenses, lower shipment volumes, the absence of a prior-year property sale gain and increased wage rates.

Quarterly revenue rose 4.8% to $2.4 billion, helped by fuel surcharges and higher shipment weights. Average daily shipments fell 5.9%, but revenue per shipment increased 11.5% and revenue per hundredweight rose 8.2%.

For the full fiscal year, revenue slipped 1.1% to $8.8 billion, while operating income dropped 58.6% to $616 million. Adjusted operating income declined 25.6% to approximately $1.1 billion, with operating margin narrowing to 7.0% from 16.7% a year earlier.

Chief Executive John Smith said the company is entering its next phase with a strategy focused on profitable growth and service differentiation, while Chief Financial Officer Marshall Witt said FedEx Freight's outlook reflects confidence in its network scale, cost discipline and cash-flow generation capabilities.

The company also announced a change in fiscal year-end from May 31 to Dec. 31 beginning June 1, 2026. FedEx Freight said its outlook assumes no further deterioration in economic conditions, geopolitical developments or trade-related disruptions.