FedEx Corp. reported fiscal second‑quarter 2026 results that surpassed consensus expectations, delivering adjusted earnings per share of $4.82—$0.71 above the $4.11 estimate and a 17% year‑over‑year increase. Revenue rose 7% to $23.5 billion, beating the $22.86 billion consensus and reflecting a 19% lift in earnings driven by higher yields and a favorable mix shift toward the Express segment.
The Express segment led the growth story, with revenue up 8% to $10.2 billion, driven by stronger U.S. domestic and international priority package volumes. Freight revenue slipped 3% to $3.1 billion, while Ground revenue held steady at $4.0 billion. The mix shift toward higher‑margin Express services helped lift the company’s adjusted operating margin by 60 basis points year‑over‑year, and the Express margin expanded by 100 basis points.
Margin expansion was largely attributable to disciplined cost management and the continued rollout of the Network 2.0 transformation, which has reduced fuel and labor costs. Pricing power in the Express segment allowed FedEx to maintain higher yields even as freight rates faced headwinds from global trade uncertainty and rising transportation costs.
FedEx acknowledged several headwinds, including the grounding of its MD‑11 aircraft fleet, which has constrained capacity in the freight network, and broader macro‑economic pressures such as higher wage and transportation rates. No specific dollar amount for the MD‑11 cost impact was disclosed, but management noted it as a contributing factor to the quarter’s performance.
In light of the strong results, FedEx raised its full‑year 2026 adjusted EPS guidance to $17.80–$19.00, up from the prior $17.20–$19.00 range, and lifted its revenue growth forecast to 5%–6% from 4%–6%. The guidance reflects confidence in sustained demand for priority package services and the continued effectiveness of cost‑saving initiatives.
CEO Raj Subramaniam highlighted the company’s “outstanding” performance, emphasizing the success of the network transformation and the strategic decision to spin off FedEx Freight as a separate entity by June 2026. CFO John Dietrich noted that the quarter’s earnings beat was driven by a 19% year‑over‑year revenue increase and a 60‑basis‑point margin expansion. Investors reacted positively to the earnings beat and guidance, underscoring confidence in FedEx’s execution and future growth prospects.
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