FedEx says 'exceptional' holiday season will drive expected third-quarter earnings beat

Core Viewpoint - FedEx projects significant revenue growth over the next three fiscal years, driven by digital innovation and new business lines in Europe, with adjusted earnings for Q3 expected to exceed Wall Street estimates due to a strong holiday season [1][2]. Revenue Projections - For fiscal 2026, FedEx anticipates approximately $93.5 billion in revenue, which includes its freight business that is set to be spun off into a separate publicly traded company in June [2]. - The company targets around $98 billion in consolidated revenue for fiscal 2029, excluding the freight business, representing a 4% compound annual growth rate [3]. Financial Performance - FedEx expects operating income of $8 billion and an operating margin of 8% by 2029, which is an increase of roughly 2 percentage points from projected fiscal year 2026 levels [4]. - The company is projected to generate $6 billion in free cash flow by 2029 [3]. Strategic Initiatives - FedEx is investing in digital intelligence and automation, which is expected to differentiate it from competitors and contribute to revenue growth [4]. - The company aims for an 8% operating margin internationally, with a focus on improvements in Europe, including the acquisition of European company InPost for €15.60 per share (approximately $18.51 per share) [5].