Fedex The company reported better quarterly profit and revenue on Tuesday as it announced its $4 billion cost reduction target and aims to cut another $1 billion next year.
The company has achieved “structural cost reduction targets in the face of ongoing headwinds,” CEO Raj Subramaniam said in a media release.
“We are confident that our transformation initiative, which focuses on network integration and further reduces costs, will create meaningful long-term value,” he said.
FedEx stock fell approximately 5% in after-hours trading as it provided profit guidance for the current quarter, slightly below what Wall Street had hoped for.
As of Tuesday’s end, FedEx stock had fallen more than 18% since the start of the year.
Based on analyst research by LSEG, here is how the company did in the fourth quarter of 2025 compared to what analysts had expected:
Earnings per share: $6.07 adjusted vs. $5.84 forecast: $222.2 billion vs. $217.9 billion
FedEx reported that daily package volumes in the US increased by 6% year-on-year. In particular, US ground delivery volumes rose 10% year-on-year.
The company reported net income of $1.65 billion, or $6.88 per share, on May 31, compared to the previous year’s $1.47 billion, or $5.94 per share. FedEx reported earnings per share of $6.07, adjusting for one-time items, including accounting expenses related to retirement plans and other fees.
Revenue for the fourth quarter increased to $222.2 billion, slightly higher than the previous year’s $22.1 billion.
Revenue for the entire fiscal year was $87.9 billion, up from $87.7 billion in fiscal year 2024.
FedEx and Rivals UPS They are commonly considered the tip of the global economy because they are exposed to a variety of businesses.
FedEx reported capital expenditures for fiscal year 2025 were $4.1 billion, down 22% from $5.2 billion in fiscal year 2024. According to the release, capital expenditures as a percentage of revenues have reached the lowest level in FedEx history.
The cut in spending is because FedEx is chasing long-term cost-cutting initiatives. The drive program, introduced in 2023, is intended to improve long-term profitability. FedEx said Tuesday it had achieved its $4 billion total savings target by the end of fiscal year 2025, compared to its baseline for fiscal year 2025.
The full year 2026 guidance includes $1 billion in cost savings. The company declined to provide full-year 2026 revenue and profit forecasts.
In the first quarter of 2026, FedEx gave mixed guidance. We forecast revenues to rise by 2% year-on-year, surpassing StreetAccount estimates, which are seeking a 0.1% decline in revenues. However, FedEx expects adjusted earnings per share to be between $3.40 and $4.00, with StreetAccount estimates at just $4.06.
CFO John Dietrich said in a call with investors on Tuesday that the company’s first quarter revenue guidance includes a $170 million headwind from international exports due to the impact of global trade policy.
“The majority of this was the impact from China to the US, and of which the majority were the impact of de Minimis,” said Brie Curraire, executive vice president and chief customer officer.
In December, FedEx announced its long-standing planning plan to spin out its freight division, leaving two public companies behind. At the time, FedEx said it expects the tax-free spinoff to run within 18 months.
Quarterly results came just days after FedEx founder and executive chairman Fred Smith passed away at the age of 80. Smith resigned as CEO in 2022 and was taken over by Subramaniam.
