FedEx Raises Full-Year Profit Forecast and Confirms June Freight Spin-Off

2025-12-19 companies

Memphis, Friday, 19 December 2025.
FedEx exceeded expectations with $23.5 billion in revenue and raised its full-year outlook, confirming the strategic spin-off of its freight unit remains on schedule for June 1.

Strong Financial Performance Beats Estimates

In its report released Thursday, FedEx posted adjusted earnings per share (EPS) of $4.82, a notable increase from the $4.05 recorded in the same period last year [1]. This performance represents a year-over-year growth of 19.012% and significantly outpaced the Wall Street consensus estimate of $4.12 [5]. The company’s revenue of $23.5 billion also came in well ahead of the projected $22.78 billion, driven largely by an 8% increase in FedEx Express revenue and improved yields in domestic package volumes [1][7].

Managing Operational Headwinds

Despite the positive financial trajectory, FedEx faces immediate operational challenges regarding its air fleet. Following a fatal UPS crash involving an MD-11 aircraft on November 4, 2025, the FAA grounded FedEx’s fleet of 28 operational MD-11s [3]. This regulatory action is expected to result in approximately $175 million in unexpected costs, as the company secures alternative capacity during the critical peak shipping season [3]. While $25 million of this impact was absorbed in November, the remaining costs will weigh on the third quarter, with the fleet not expected to return to service until May 31, 2026 [3].

Strategic Realignment and Shareholder Value

Looking toward the long term, the company reaffirmed its timeline for the separation of FedEx Freight. The tax-free spin-off is set to conclude on June 1, 2026, establishing the freight unit as an independent, publicly traded entity [1]. This strategic move aims to unlock specific shareholder value and streamline the parent company’s focus [1]. In preparation for the split, FedEx Freight incurred $152 million in one-time separation costs during the second quarter [1]. Further details on the new company’s structure will be presented at an Investor Day in New York City on April 8, 2026 [1].

Sources

FedEx Logistics