Subramaniam said results were “largely driven” by Federal Express Corporation (FEC), which grew revenue 10% and expanded adjusted operating margin by 50 basis points. He said the quarter marked the sixth consecutive quarter of margin expansion at FEC, with adjusted operating income up 18%.Chief Financial Officer John Dietrich said FedEx’s adjusted earnings per share increased 16% year over year. He noted that third-quarter adjusted EPS included a one-time benefit of $0.41 from a favorable effective tax rate ...

Financial Data and Key Metrics Changes - Revenue increased by 8% year-over-year, driven by yield and volume strength across nearly all package services [6] - Adjusted operating income grew by 7% year-over-year, with a 16% increase in adjusted EPS [25] - Adjusted EPS outlook for FY 2026 raised to $19.30-$20.10 per diluted share [8][29] Business Line Data and Key Metrics Changes - FedEx Express (FEC) revenue grew by 10%, with adjusted operating margin expanding by 50 basis points, marking the sixth consecutive quarter of margin expansion [7] - FedEx Freight revenue declined by 5%, pressured by lower shipments, but revenue per shipment increased by 1% [17][19] - International priority and economy freight revenue grew by 14%, supported by the Tricolor strategy [16] Market Data and Key Metrics Changes - U.S. domestic package yield increased by 5%, while international export package yield grew by 6% [19] - International export volumes increased by 2% year-over-year for the first time in fiscal year 2026 [18] - The company reduced trans-Pacific outbound capacity by approximately 15% and 25% during the quarter [10] Company Strategy and Development Direction - The company is focused on growing in high-margin verticals, transforming its network, and leveraging data and technology for efficiency gains [5] - Plans to spin off FedEx Freight on June 1, 2026, are on track, expected to unlock long-term value for stockholders [6][37] - The introduction of new technologies, such as the Dun & Bradstreet and FedEx Dataworks Retail Momentum Index, aims to enhance service and operational efficiency [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of consolidated Q3 results and updated assumptions for Q4, expecting continued revenue growth [8] - The company is closely monitoring the situation in the Middle East, emphasizing the safety of team members while managing network adjustments [41] - Management acknowledged challenges in the LTL market but remains optimistic about future growth as the market recovers [18] Other Important Information - The company expects $2 billion in cumulative savings from Network 2.0 and associated initiatives by the end of 2027 [9] - The company is committed to maintaining disciplined capital allocation, with FY 2026 CapEx expected to be no more than $4.1 billion [36] Q&A Session Summary Question: Impact of the Iran conflict on operations - Management is monitoring the situation closely and has adjusted the network to accommodate the conflict, with minimal expected impact on overall revenue [41][42] Question: Outlook for the LTL business - Management noted that the LTL industry is experiencing broader market softness, with increased separation costs expected to continue [47] Question: Year-over-year headwinds for Q4 - Management highlighted a $500 million headwind due to variable compensation, LTL business challenges, and MD-11 impacts [54] Question: Sustainability of volume and yield growth - Management acknowledged the current growth as an anomaly but expressed confidence in maintaining momentum into Q4 [59][60] Question: Cost dynamics and future expectations - Management emphasized ongoing cost containment efforts and the potential for further savings as the company continues to implement structural cost-out initiatives [85]

Investor Relations March 19, 2026 Roadshow presentation *Average daily volume information for Q3 FY26, YTD 3 4 4 2 Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding expected cost savings, the optimization of our network through Network 2.0, the planned tax-free full separation of the FedEx Freight business into a new p ...

FedEx (FDX) 2025 Conference Summary Company Overview - **Company**: FedEx Corporation - **Event**: 32nd Annual BofA Industrial Transportation and Airlines Key Leaders Conference - **Date**: May 12, 2025 - **Speakers**: John Dietrich (EVP and CFO), Brie Carrera (EVP and Chief Customer Officer), and the FedEx IR team Key Points Industry Context - FedEx is navigating a challenging economic backdrop, particularly in the B2B sector, which is experiencing recessionary pressures, while B2C remains strong with positive consumer sentiment [20][18] - The company is adapting to recent tariff agreements with China, which are expected to impact shipping volumes and customer behavior [21][23] Strategic Initiatives - **Drive Program**: FedEx has successfully improved operating income (OI) despite revenue declines, showcasing effective cost management and commercial discipline [13][14] - **Network 2.0**: The initiative aims to achieve $2 billion in savings, with a focus on integrating operations without disrupting service levels [92][93] - **Tricolor Achievements**: This program is designed to optimize asset allocation across different freight types, targeting a $80 billion market opportunity [51] Customer Relationships - FedEx has re-engaged with Amazon as a customer for the first time since 2019, focusing on profitable large package deliveries, which will enhance average weight per package and yield [66][70] - The company emphasizes its strong relationships with small and medium-sized businesses (SMBs), maintaining a direct sales approach that supports over 90% of its revenue [108][109] Financial Performance - FedEx reported that its customer base generates approximately $2 trillion in gross merchandise value (GMV) across 2.5 million customers [16] - The company is on track to deliver $2.2 billion in savings for FY25 as part of its ongoing Drive initiative, despite facing inflationary pressures and operational challenges [90][91] Market Dynamics - The recent tariff changes are expected to create a temporary pause in shipping as customers reassess their strategies, particularly concerning inventory management ahead of the holiday season [26][27] - FedEx's international revenue is primarily driven by U.S. domestic operations, with 75% of revenue coming from domestic sources [40] Operational Challenges - The end of the de minimis exemption for low-value shipments from China is anticipated to significantly impact e-commerce volumes, particularly for small businesses [41][44] - FedEx is actively working to assist customers in navigating the complexities of new tariff regulations and compliance requirements [59][61] Future Outlook - FedEx is optimistic about its growth trajectory, particularly in Europe, where it aims to leverage its ground capabilities to improve service levels and profitability [120][122] - The company is focused on technological advancements to streamline operations and enhance customer service, including a shift towards a unified IT infrastructure [100][102] Additional Insights - FedEx's competitive advantage lies in its extensive global network and ability to adapt quickly to changing market conditions, which is crucial for maintaining customer trust and operational efficiency [17][50] - The company is committed to continuous improvement and innovation, ensuring that it remains a leader in the logistics and transportation industry [106][107]