Oct 28 (Reuters) – FedEx forecast annual profit above estimates on Wednesday after reporting a 28% rise in third-quarter earnings, driven by improved pricing, higher volumes and cost-saving measures.
However, its shares dropped nearly 4% in extended trading after quarterly operating margin at its core US express delivery segment fell to 6.6% from 6.8% the year before.
The Memphis-based company expects 2026 adjusted profit in the range of $18-$18.60 per share, above analysts’ expectation of $17.73 per share, according to data compiled by LSEG.
FedEx switched to reporting on a calendar rather than fiscal-year basis beginning in the latest quarter.
It said results improved due to better returns on packages, higher volumes and ongoing cost savings. Those factors were partly offset by the cost of hiring additional transportation, increased employee wages and compensation as well as changing US tariff policies.
“We remain committed to disciplined operational execution to reduce our cost-to-serve while focusing on profitable growth,” CEO Raj Subramaniam said.
FedEx, a bellwether for global trade, reported third-quarter adjusted profit of $3.74 per share, up from $2.93 per share the year before.
(Reporting by Nandan Mandayam and Lisa Baertlein; Editing by Pooja Desai)
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