FedEx Lifts 2026 Earnings Outlook After Freight Spin-Off, Discloses $2 Billion in Buybacks

FedEx raised its calendar 2026 earnings outlook on Wednesday after third-quarter revenue and adjusted profit rose following the spin-off of its FedEx Freight business, and it disclosed $2 billion of stock buybacks since June.

The delivery giant now expects adjusted diluted earnings from continuing operations of $18.00 to $18.60 a share for calendar 2026, up from $16.90 to $18.10, according to the earnings release it filed with an 8-K on Wednesday. It also lifted its revenue growth forecast to about 12% from about 11%.

The quarter in numbers

Revenue from continuing operations for the quarter ended Sept. 30 rose to $22.9 billion from $20.4 billion a year earlier. Adjusted operating income climbed to $1.20 billion from $1.03 billion, and adjusted operating margin widened to 5.3% from 5.1%.

Adjusted diluted EPS rose to $3.74 from $2.93. On a GAAP basis, however, EPS fell to $1.21 from $2.73, as a $1.2 billion loss on FedEx's retained stake in FedEx Freight outweighed a $627 million pre-tax gain from retiring debt.

FedEx said results were driven by higher package base yields, more package volume and structural cost cuts, partly offset by higher purchased transportation and wage rates and the financial impact of global trade policy changes.

"FedEx is winning across high-value market segments while we optimize our network, driving an increase to our full-year outlook," CEO Raj Subramaniam said in the release.

A new reporting setup

The results reflect two big changes. FedEx completed the spin-off of FedEx Freight on June 1, keeping a 19.9% stake now carried at $3.3 billion, and it switched its fiscal year end from May 31 to Dec. 31, according to a separate 8-K filed Wednesday with recast historical results. FedEx will file a transition report covering June 1 through Dec. 31, 2026, and now reports two segments: Express U.S. Domestic and Express International.

Express U.S. Domestic posted operating income of $946 million, up from $884 million, on higher yields, volume and cost savings. Express International earned $220 million, up from $192 million, helped by higher base yields and international export volume.

Buybacks, debt and a sale

FedEx repurchased about 6.3 million shares for $2.0 billion from June through September, leaving $4.3 billion under its 2026 authorization. It used an approximately $4.1 billion dividend from FedEx Freight plus cash on hand to tender for about $4.9 billion of debt.

On Oct. 1, the company closed the sale of FedEx Supply Chain to CMA CGM Group for about $1.4 billion. Cash stood at $8 billion at quarter end, including about $2.7 billion in tariff refunds held for return to customers.

"Our decision to repurchase $2 billion of FedEx stock displays our conviction in achieving our 2029 financial targets," interim CFO Claude Russ said.

On a GAAP basis, FedEx now sees calendar 2026 diluted EPS from continuing operations of $35.30 to $35.90, a figure that includes gains tied to the Freight investment and debt extinguishment. Capital spending is still forecast at $3.9 billion.

Sources

1. FedEx Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001048911-26-000128)
2. FedEx Form 8-K with recast historical financial information reflecting the FedEx Freight spin-off and change in fiscal year end, filed Oct. 28, 2026 (accession 0001048911-26-000126)

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