FedEx has reported stronger-than-expected results for its fiscal fourth quarter ending May 31, 2025, with a cautious outlook amid ongoing economic uncertainties.
The global logistics company posted adjusted earnings per share (EPS) of $6.07, exceeding analyst predictions of $5.84, alongside revenue of $22.22 billion, slightly above the anticipated $21.79 billion. This represents a modest year-on-year increase in revenue, demonstrating resilience in a challenging market environment.
The firm’s net income for the quarter reached $1.65 billion, or $6.88 per share on a GAAP basis, compared with $1.47 billion, or $5.94 per share, a year earlier. These figures were adjusted to exclude one-off items such as retirement plan accounting adjustments and restructuring costs, providing a clearer picture of operational performance.
FedEx’s U.S. package volume rose by 6% year-on-year, with U.S. ground home delivery volumes increasing by 10%, showing strong demand in key domestic sectors. Despite these gains, the company’s shares fell approximately 5% in after-hours trading following the earnings announcement, as FedEx withheld a full-year fiscal 2026 earnings forecast for the first time in over a decade. This move shows uncertainty driven by global trade policy tensions and macroeconomic headwinds, particularly affecting international export volumes.
CEO Raj Subramaniam emphasised the company’s success in meeting its $4 billion DRIVE programme cost-saving target, launched in fiscal 2023 to improve long-term profitability through structural cost reductions and network integration.
“Looking ahead, I’m confident that our transformation initiatives, which are focused on integrating our networks and further reducing our cost-to-serve, will create meaningful long-term value,” Subramaniam stated. FedEx intends to pursue an additional $1 billion in cost savings during fiscal 2026 as part of this ongoing transformation.
Capital expenditure for fiscal 2025 was reduced to $4.1 billion, down 22% from $5.2 billion the previous year, marking the lowest capital spend as a percentage of revenue in the company’s history. This reduction aligns with its strategy to streamline operations and boost cost efficiency amid a cyclical downturn in the air freight and logistics sector.
FedEx’s guidance for the first quarter of fiscal 2026 projects revenue to be flat or grow up to 2%, slightly surpassing analyst expectations of a minor decline. However, adjusted EPS guidance ranges from $3.40 to $4.00, marginally below the consensus estimate of $4.06.
CFO John Dietrich noted that the revenue outlook incorporates a $170 million headwind from international exports, largely due to trade policy impacts on the Trans-Pacific trade route.
Executive Vice President Brie Carere added that “the vast majority of that is impact from China to the U.S. and within that, the vast majority is the impact of de minimis,” referring to a tax provision affecting low-value shipments.
In December 2024, FedEx announced plans to spin off its Freight division into a separate publicly traded company within the next 18 months. This move aims to unlock shareholder value by allowing each business to focus on its core operations independently.
The quarterly results come shortly after the death of FedEx’s founder and executive chairman, Fred Smith, who passed away aged 80. Smith founded Federal Express in 1973 with a modest initial operation and stepped down as CEO in 2022, succeeded by Subramaniam. Under Smith’s leadership, FedEx grew into one of the world’s largest logistics and parcel delivery firms, handling approximately 16 million packages daily.