FedEx Reports Strong Fiscal Q1 Results, Shares Rise Over 5%
FedEx delivered better-than-expected financial results for its first fiscal quarter ending August 31, 2025, prompting a more than 5% jump in after-hours stock trading on Thursday.
Financial Performance Exceeds Analyst Forecasts
The shipping giant posted adjusted earnings per share (EPS) of $3.83, surpassing the consensus estimate of $3.59. Revenue totaled $22.24 billion, outperforming the predicted $21.66 billion.
Net income stood at $820 million, or $3.46 per share, compared to $790 million, or $3.21 per share, in the prior-year period. Excluding costs related to the FedEx Freight spin-off and other adjustments, net income was $910 million, or $3.83 per share.
Operational Highlights and Segment Performance
FedEx reported a 6% increase in average daily U.S. package volumes, which contributed to improved segment operating results. However, the FedEx Freight division experienced a decline in operating results due to reduced revenue and increased wage expenses.
Outlook and Strategic Initiatives
Looking ahead, FedEx projects revenue growth of 4% to 6% for fiscal 2026, significantly above the Wall Street estimate of 1.2%. The company expects full-year EPS between $17.20 and $19, with a midpoint of $18.10, slightly below the consensus estimate of $18.21.
CEO Raj Subramaniam emphasized the ongoing uncertainty in the global trade environment, noting that the company faced approximately $150 million in headwinds related to these factors. He highlighted the company’s adaptability in navigating a dynamic macroeconomic landscape.
FedEx is advancing its plan to spin off FedEx Freight into an independent publicly traded entity, with completion anticipated by June 2026.
Impact of Regulatory Changes on Shipping Volume
FedEx pointed to the recent expiration of the “de minimis” exception, which allowed shipments valued under $800 to enter the U.S. duty-free. This regulatory change, introduced via an executive order by former President Donald Trump, led FedEx to implement modest shipping fee increases.
Subramaniam noted that a significant portion of volume affected by the end of the de minimis rule originated from China. The company leveraged insights from earlier adjustments in May to assist shippers in other regions adapting to the new regulations.
FinOracleAI — Market View
FedEx’s stronger-than-expected Q1 results and upward revenue guidance reflect resilience amid ongoing global trade uncertainties and regulatory shifts. The 6% growth in U.S. package volumes supports operational strength, though margins face pressure from wage inflation and spin-off costs. Investors should monitor the FedEx Freight spin-off progress and potential impacts from evolving trade policies.
Impact: positive
