FedEx Corp shares surged after it reported an 18% increase in net income for the third quarter of the 2026 financial year (Q3 FY26) and raised its full-year profit forecast.
The global delivery company said net income increased to US$1.06 billion (A$1.50 billion) in the three months ended 28 February 2026 from $910 million in the previous corresponding period as deliveries surged during the all-important holiday quarter.
Diluted earnings per share (EPS) grew 31% to $4.41 on revenue which rose 8% to $24 billion.
The company revised its EPS forecast for the financial year ending 31 May to be between $19.30 and $20.10 from between $17.80 and $19.00.
The forecast excludes costs related to the planned spin-off of FedEx Freight, business optimisation initiatives, the planned change in the company’s fiscal year end and an international regulatory matter.
The company said revenue would grow between 6% and 6.5% in FY26 compared with the previous 5% to 6% expectation.
FedEx shares (NYSE: FDX) closed $6.27 (1.82%) higher at $356.11 on Thursday (Friday AEDT), capitalising the company at $83.73 billion, before climbing $31.31 (8.81%) to $387.41 in after-hours trading.
FedEx said the 4.6% increase in consolidated operating income in Q3 reflected strength in United States domestic and International Priority package yields, continued cost savings from transformation initiatives, and increased U.S. domestic package volume.
Net income included a tax benefit of $99 million or 41 cents per diluted share from the recognition of certain foreign tax loss carry forwards.
“Team FedEx delivered another quarter of strong financial results and excellent service for our customers, powered by disciplined operational execution, the resilience of our global network, and the accelerating impact of our advanced digital solutions,” President and Chief Executive Officer Raj Subramaniam said in a news release.
Federal Express segment operating results improved in Q3 due to higher U.S. domestic and International Priority package yields, cost savings from transformation initiatives, and increased U.S. domestic package volume.
These factors were partially offset by higher variable incentive compensation expenses and wage rates, the impact of global trade policy changes, increased purchased transportation rates, and the grounding of MD-11 aircraft after a UPS crash in November 2025.
FedEx Freight segment operating results deteriorated during the quarter as a result of higher costs associated with the spin-off, lower shipments and higher wage rates, partially offset by increased yield.
The planned spin-off of FedEx Freight into a new publicly traded company was on track for 1 June 2026.
