FedEx reported strong second quarter earnings growth driven by improved yields and cost reductions, leading to an upward revision of its full-year revenue and earnings outlook. The company is on track to spin off FedEx Freight as planned.
Total Revenue increased 7% year-over-year to $23.47 billion.
positiveDiluted EPS increased 33% year-over-year to $4.04.
positiveFederal Express segment operating income increased 47% year-over-year to $1.55 billion.
positiveFull-year revenue growth forecast raised to 5%-6% from 4%-6%.
positiveFull-year diluted EPS forecast raised to $14.80-$16.00 (before MTM adjustments) from $14.20-$16.00.
positiveFedEx Freight segment operating income decreased 71% year-over-year to $90 million, with operating margin compressing from 14.3% to 4.2%.
negativeFedEx Freight segment revenue decreased 2% year-over-year.
negativeFuel expenses decreased 6% year-over-year, but this is a favorable comparison, not a fundamental strength.
attentionBusiness optimization costs were $30 million in Q2 FY2026, down from $326 million in Q2 FY2025, indicating a favorable year-over-year comparison rather than an ongoing operational improvement.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
Federal Express segment | $20433000.0B | $18841000.0B | +8.4% | 87.1% |
FedEx Freight segment | $2139000.0B | $2177000.0B | -1.7% | 9.1% |
Other and eliminations | $897000.0B | $949000.0B | -5.5% | 3.8% |
| Total Revenue | $23469000.0B | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
FedEx delivered an outstanding second quarter as we successfully executed our growth strategy and advanced our network transformation, while navigating a highly challenging external environment.
I am extremely proud of our team members worldwide for their commitment to make every FedEx experience outstanding this Peak season.
Our strong second quarter results and revised full-year outlook reflect the momentum that is building in our business as we continue to drive stockholder value within a challenging operating environment.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.