FedEx Reports Strong Second Quarter Earnings Growth Year-Over-Year

Core Insights - FedEx Corp. reported strong consolidated results for the second quarter of fiscal 2026, with revenue reaching $23.5 billion, an increase from $22.0 billion in the same quarter of fiscal 2025 [1] - The company achieved an operating income of $1.38 billion, with an adjusted operating income of $1.61 billion, reflecting improvements in operating margin and net income [1][2] - The financial performance was driven by higher U.S. domestic and International Priority package yields, cost reductions, and increased package volume, despite challenges from global trade policies and rising costs [2][3] Financial Performance - Revenue for Q2 fiscal 2026 was $23.5 billion, compared to $22.0 billion in Q2 fiscal 2025 [1] - Operating income increased to $1.38 billion (GAAP) and $1.61 billion (non-GAAP), up from $1.05 billion (GAAP) and $1.38 billion (non-GAAP) in the previous year [1] - Net income rose to $0.96 billion (GAAP) and $1.14 billion (non-GAAP), compared to $0.74 billion (GAAP) and $0.99 billion (non-GAAP) in Q2 fiscal 2025 [1] - Diluted EPS for Q2 fiscal 2026 was $4.04 (GAAP) and $4.82 (non-GAAP), compared to $3.03 (GAAP) and $4.05 (non-GAAP) in the prior year [1] Segment Performance - The Federal Express segment saw improved operating results due to higher package yields and cost savings, while the FedEx Freight segment experienced a decline in operating results due to lower shipments and increased costs related to the spin-off preparation [2][3] - FedEx Freight incurred one-time spin-off-related costs of $152 million during the quarter [3] Share Repurchase Program - FedEx completed $276 million in share repurchases during the quarter, reducing outstanding shares and benefiting second quarter results by $0.05 per diluted share [4] - As of November 30, 2025, $1.3 billion remained available for future share repurchases under the company's authorization [5] Spin-off of FedEx Freight - The planned spin-off of FedEx Freight is on track for June 1, 2026, and is expected to be tax-efficient for stockholders [7] - FedEx Freight will operate as a separate publicly traded company under the ticker symbol FDXF [7] Outlook and Forecasts - FedEx revised its fiscal 2026 forecasts, expecting a revenue growth rate of 5% to 6% and diluted EPS of $14.80 to $16.00 before certain accounting adjustments [12] - The company anticipates pension contributions of $275 million and capital spending of $4.5 billion, focusing on network optimization and efficiency improvements [12]