FedEx reports “solid third quarter results”

This year’s and last year’s quarterly consolidated results have been adjusted for:

Consolidated operating results improved in the third quarter, driven by increased package base yields, higher package volumes, and continued structural cost reductions from business optimization initiatives. These factors were partially offset by increased purchased transportation rates, higher wage rates and variable compensation expenses, and the financial impact of global trade policy changes.

“As our strong operating results and adjusted free cash flow demonstrate, FedEx is winning across high-value market segments while we optimize our network, driving an increase to our full-year outlook,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “As we advance our transformation, we remain committed to disciplined operational execution to reduce our cost-to-serve while focusing on profitable growth. We have the right strategy in place to continue to be the world’s premier B2B parcel and air freight provider, leverage our digital insights to unlock new markets, and use disciplined capital allocation to create additional stockholder value.”

Express U.S. Domestic segment operating income increased during the quarter, driven by higher package yields, increased package volume, improved service mix, and continued cost savings from transformation initiatives. These factors were partially offset by increased purchased transportation rates and higher salaries and benefits expenses.

Express International segment operating results increased during the quarter, primarily due to increased base yields, higher international export volume, and increased freight weight. These factors were partially offset by higher wage rates, increased purchased transportation rates, and the financial impact of global trade policy changes.

FedEx Freight Spin-Off

FedEx completed the spin-off of FedEx Freight on June 1, 2026, retaining a 19.9% ownership interest in FedEx Freight. FedEx recognized a loss of $1.2 billion during the quarter within “Gain/(loss) on short-term investment” on the income statement. The carrying value of this equity security totaled $3.3 billion at September 30, 2026 and is recorded within “Short-term investment” in the condensed consolidated balance sheets.

FedEx utilized cash proceeds from the approximately $4.1 billion dividend received from FedEx Freight following the spin-off, as well as cash on hand, to fund cash tender offers for approximately $4.9 billion aggregate principal amount of outstanding debt securities, resulting in a non-GAAP, pre-tax gain of $627 million.

FedEx Supply Chain Sale

On October 1, 2026, FedEx completed the sale of its subsidiary FedEx Supply Chain to CMA CGM Group for a purchase price of approximately $1.4 billion. The transaction represents another important step in the ongoing transformation of FedEx, advancing its strategy to simplify its portfolio, sharpen its focus, and concentrate resources on the areas where the company is best positioned to create long-term value.

2027 Rate Increases

As previously announced, effective January 4, 2027, FedEx parcel shipping rates will increase by an average of 5.9%. Details related to these and additional changes to rates and surcharges are available at fedex.com/en-us/shipping/rate-changes.html.

Cash and Capital Returns

Cash on-hand as of September 30, 2026 was $8 billion, which included approximately $2.7 billion in IEEPA tariff refunds held for refund to customers.

FedEx completed $2.0 billion in stock repurchases via open market and accelerated share repurchase transactions in June through September. Approximately 6.3 million shares were repurchased, with the decrease in outstanding shares benefiting third quarter results by $0.02 per diluted share. FedEx will continue to be opportunistic with stock repurchases. As of September 30, 2026, $4.3 billion remained available for repurchases under the company’s 2026 stock repurchase authorization.

“Our solid third quarter results and higher 2026 financial outlook reflect the focused execution of our strategy, demonstrating momentum toward our 2029 financial targets,” said Claude Russ, FedEx Corp. enterprise vice president and interim chief financial officer. “Our decision to repurchase $2 billion of FedEx stock displays our conviction in achieving our 2029 financial targets and our commitment to deploy our strong free cash flow to increase stockholder returns.”