FedEx Freight Sees Adjusted Earnings of Up to $0.75 a Share in Holiday Quarter
Key Facts
FedEx Freight expects adjusted earnings of $0.65 to $0.75 a share in the three months ending Dec. 31, 2026, the holiday season, after reporting September-quarter adjusted earnings above analysts’ estimates. The company forecast revenue of $2.30 billion to $2.37 billion for the coming period, compared with $2.07 billion in the corresponding period of 2025. The outlook comes as the largest U.S. less-than-truckload carrier continues to operate following its separation from FedEx. In extended trading on Oct. 29, the shares rose 3.4% after the announcement. The company’s stock, listed under the ticker FDXF, also closed at $109.69 that day.
Adjusted earnings were $1.49 a share in the September quarter, exceeding analysts’ estimate of $1.36 but remaining below the $2.10 a share reported a year earlier. Quarterly revenue rose 8% to $2.44 billion, ahead of the market estimate of $2.37 billion. The company attributed revenue growth to improved yields and fuel surcharges, according to Reuters. The beat, however, did not erase the weaker year-over-year earnings comparison. Reuters said the decline was mainly linked to costs from the separation from FedEx and higher fuel prices.
Over an unusual four-month transition period ended Sept. 30, FedEx Freight reported revenue of $3.3 billion, up 9.2% year over year. Adjusted operating income rose 16.4% to $510 million, while adjusted diluted earnings per share fell 24.6% to $2.15. The period included June and the three months ended in September, as the company shifted to a calendar reporting year. On an unadjusted basis, operating income was $383 million, down 6.1%, and diluted earnings per share were $1.54, down 43%. The results show revenue and adjusted operating income growth alongside a decline in earnings per share compared with the prior period.
The company said revenue over the four months increased on fuel surcharges, higher weight per shipment, an extra operating day and higher base revenue per hundredweight. These factors partly offset weaker freight volumes, keeping revenue growth positive despite lower daily activity. Average daily shipments were 88.9 thousand, down 1.4% year over year. By contrast, revenue per shipment rose 10.1% to $413. Excluding fuel, revenue per shipment increased 1.6% to $318.23, pointing to a modest improvement in underlying yield alongside the impact of fuel surcharges.
Chief Financial Officer Marshall Witt said underlying business performance was largely in line with the company’s expectations and that its initiatives were strengthening the foundation for growth and profitability. He added that FedEx Freight updated its outlook for the transition period to reflect a benefit from fuel and slightly higher volume assumptions, saying, "We remain confident in the underlying business as we approach 2027." Witt expected freight volumes to remain a factor in results, after weakness in volumes limited the impact of improved revenue per shipment. Separation costs and fuel prices remain among the factors weighing on the September-quarter earnings comparison. That puts the coming guidance in the context of the company’s effort to improve performance as the new year begins.
For 2027, FedEx Freight expects revenue growth and adjusted operating margin to remain in line with its medium-term targets of 4% to 6% and 15%, respectively. It also said it plans to announce a dividend and share repurchase plan for calendar year 2027, subject to board approval. The announcement is part of the company’s commitments to return capital to shareholders following the separation. Markets are also watching the company’s delivery against its forecast for the quarter ending in December, which calls for revenue of $2.30 billion to $2.37 billion and adjusted earnings of $0.65 to $0.75 a share after excluding separation costs. The capital return plan remains subject to board approval.