FedEx (FDX) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 8% year-over-year to $24.0 billion, driven by strong U.S. domestic and international package yields, increased U.S. package volume, and robust execution on strategic priorities including network transformation and high-margin vertical growth.

• Achieved highest quarterly U.S. domestic revenue since FY 2022 and most profitable Peak season, with best monthly revenue performance in December.

• Transformation to an integrated intelligent network is progressing, with 35% of eligible volume now flowing through optimized facilities and continued digital and AI-powered solution launches.

• Announced plans to spin off FedEx Freight by June 1, 2026; leadership team in place, debt offering completed, and NYSE listing planned.

• Net income increased 16% year-over-year to $1.06 billion, with adjusted EPS up 16% to $5.25, benefiting from a $99 million tax benefit.

Financial highlights

• Q3 adjusted operating income grew 7% year-over-year to $1.62 billion; adjusted EPS up 16% to $5.25, including a $0.41 one-time tax benefit.

• Federal Express segment revenue increased 10% to $21.2 billion, with adjusted operating income up 18% and margin expansion.

• FedEx Freight revenue declined 5% to $2.0 billion, with operating income down 97% due to separation costs and weak LTL demand.

• Achieved $1 billion in year-to-date cost reduction, with year-to-date dividends paid totaling $1.0 billion and share repurchases of $776 million.

• Cash and equivalents at quarter-end were $11.7 billion, up from $5.1 billion a year ago; capital expenditures for the nine months were $2.34 billion, down 10% year-over-year.

Outlook and guidance

• Raised FY 2026 adjusted EPS outlook to $19.30–$20.10 per diluted share, up from prior $17.80–$19.

• Expect 6%–6.5% consolidated revenue growth for FY 2026, with Q4 revenue growth of 6%–7.5%.

• FEC full-year revenue growth forecast at approximately 8%; FedEx Freight FY 2026 revenue expected to be down low single digits year-over-year.

• Permanent cost reductions of over $1 billion expected in FY 2026 from transformation initiatives.

• FY 2026 CapEx forecast capped at $4.1 billion, prioritizing network optimization and modernization.