FedEx’s Fresh Start: Bigger Numbers, New Direction

FedEx announced last week that its final quarter before separating its freight arm hit higher earnings and sales than Wall Street had predicted.

Q4 Highlights

• Revenue: $25.01 billion – up $0.97 billion from analysts’ estimate of $24.04 billion.
• EPS: $6.31 – above the anticipated $5.96.

This quarter marked a turning point, as FedEx Freight spun off into its own public company on June 1. In return for the split, FedEx Freight sent about $4.1 billion in cash dividends to FedEx Corporation, a significant payout that helped bolster the parent company’s balance sheet.

Segment Performance

• FedEx Express: $21.57 billion, beating forecasts by nearly $0.8 billion.
• Domestic package volume: +3 % YoY
• Priority services in the U.S.: +3 % YoY

Fiscal Year Overview

• Revenue: $94.7 billion – up 7.6 % from $87.9 billion the year before.
• CEO Raj Subramaniam: “Our profitable growth strategy is working,” noting that the freight spin‑off positions FedEx to keep expanding while trimming costs and boosting free cash flow.

Corporate Actions

• Fiscal year end moved from May 31 to December 31, effective earlier this month.
  This shift aligns FedEx’s reporting cycle with many industry peers and may simplify financial planning for investors.

Outlook

• Revenue growth: Projected at 11 % YoY.
• Adjusted diluted EPS: Expected to fall between $16.90 and $18.10 for the full year, signaling confidence in continued performance despite a challenging economic backdrop.