EPS, revenue and margins all beat expectations
- Cost discipline and efficiency gains drove upside
- FY EPS guidance floor raised; capex unchanged
FedEx delivered a strong fiscal second-quarter performance, beating expectations across earnings, revenue and margins, as cost discipline and improved network efficiency more than offset a still-muted global demand backdrop.
The parcel delivery group reported adjusted earnings per share of $4.82, comfortably above consensus expectations of $4.12, driven by stronger operating leverage and continued progress under its multi-year efficiency and network optimisation initiatives. Revenue rose to $23.5bn, ahead of forecasts for $22.8bn, while adjusted operating income climbed to $1.61bn, beating estimates of $1.36bn.
Adjusted operating margin improved to 6.9%, versus expectations of 6.07%, reflecting better cost absorption, productivity gains and tighter expense controls. Management highlighted benefits from ongoing transformation efforts, including structural cost reductions, route optimisation and improved asset utilisation.
At the divisional level, Federal Express revenue came in at $20.43bn, exceeding expectations of $19.72bn, supported by improved yields and efficiency gains, even as overall shipment volumes remained uneven across regions. FedEx Freight revenue was $2.14bn, broadly in line with estimates, with management noting stabilising trends in the U.S. industrial economy.
Looking ahead, FedEx lifted the lower end of its full-year adjusted EPS guidance, now forecasting $17.80–$19.00, compared with a prior range of $17.20–$19.00, signalling confidence in margin resilience and execution momentum. Capital expenditure guidance was left unchanged at $4.5bn, in line with expectations, underscoring continued discipline on investment while prioritising efficiency-enhancing projects.
Overall, the results reinforce FedEx’s narrative that self-help measures and structural improvements are cushioning the impact of softer macro conditions, positioning the company for stronger earnings leverage should volumes recover.
