FedEx Corp shares fell in after-hours deals on Tuesday (Wednesday AEST) due to concerns about lower margins and despite the global delivery company surpassing profit estimates in the fourth quarter of the 2026 financial year (Q4 FY26) and forecasting 11% revenue growth.
FedEx said net income fell 3% to US$1.60 billion (A$3.03 billion) and diluted earnings per share (EPS) dropped 4% to $6.60 on revenue, which grew 13% to $25 billion in the quarter ending 31 May 2026.
Although adjusted Q4 EPS of $6.31 was higher than analysts' average estimates of $5.96, margins at its core Federal Express segment fell to 7.7% from 8.4% as the cost of employees, outsourced transportation and fuel climbed.
For the full year, FedEx said net income rose 8% to $4.43 billion, and diluted EPS jumped 10% to $18.55 on revenue which grew 8% to $94.7.
It also forecast revenue growth of 11% in the 2026 calendar year, with the new time period reflecting the decision to change the fiscal year end from 31 May 31 to 31 December effective for the period beginning 1 June.
The stock (NYSE: FDX) closed $11.54 (3.51%) lower at $317.24 on Tuesday (Wednesday AEST), capitalising the company at $75.70 billion, before the results were announced.
After the results, they fell another $19.74 (6.22%) to $297.50 in after-hours trading.
FedEx said consolidated adjusted operating income improved 3% in the fourth quarter, reflecting continued strength in U.S. domestic and international priority package yields, transformation cost savings initiatives, and higher international export package volume.
“Team FedEx delivered an impressive finish to a strong fiscal year, providing excellent service to our customers and successfully executing on our transformation initiatives,” President and Chief Executive Officer Raj Subramaniam said in a news release.
“Our profitable growth strategy is working. We are building momentum across our global industrial network, driving structural improvements and winning in high-value growth markets.
“With the successful spin-off of FedEx Freight, we are entering this next chapter positioned to grow while further optimising our network, lowering our cost to serve, creating meaningful long-term value, and driving robust free cash flow.”
FedEx Freight was listed separately on 1 June.
Fourth quarter results included a non-cash impairment charge of $23 million (seven cents per diluted share) from the decision to permanently retire 10 aircraft.
