Rosa: It was a good quarter, but the second-half guide raised real questions

Financial Performance - FedEx's fiscal second quarter beat expectations, leading to a raise in guidance, but the entirety of the raise was a result of this beat [3] - Freight business margins declined year-over-year by 300 basis points [6] - FedEx took a $150 million charge [9] Operational Challenges and Strategies - FedEx faces costs associated with grounding MD11 planes [3] - Higher incentive compensation for employees is weighing on second-half earnings [4] - Industrial weakness is impacting FedEx's freight segment [4] - FedEx is preparing for a freight spin-off planned for June 2026, incurring costs related to hiring a salesforce and IT expenses [8] - Weak demand environment from a freight perspective, especially for heavy oversized goods, is impacting margins [9] - FedEx's US ground home delivery volumes are up 8%, and pricing is up 5% [10] - FedEx is winning business on its express side due to good pricing, revenue mix, and business wins [11] - FedEx is making progress on improving margins and driving efficiencies through network 20, integrating express and ground networks [12] Market and Industry Outlook - The transport sector has been rallying recently [14] - CH Robinson is seen as an AI play due to its technology-driven freight matching [15] - Restrictions on non-domiciled CDLs are pushing up freight rates [16] - The setup for 2026 is expected to be better for transports [16]