Financial Data and Key Metrics Changes - Revenue increased by 3% year over year, driven by strength in U.S. Domestic package services [7] - Adjusted operating income grew by 7% [7] - Adjusted earnings per share reached $3.83, up 6% year over year [39] - Adjusted operating margin expanded by 20 basis points [39] Business Line Data and Key Metrics Changes - Federal Express Corporation (FEC) revenue rose by 4% year over year, with adjusted operating income increasing by 17% [8][42] - FedEx Freight experienced continued pressure, with average daily shipments declining [26] - U.S. Domestic package yield increased by 3%, while international export package yield grew by 4% [27][28] Market Data and Key Metrics Changes - International export volumes declined, particularly on the China to U.S. lane [24] - The LTL market remains rational despite prolonged weakness in the industrial economy [9] - U.S. Domestic small business revenue grew by over 10% year over year [35] Company Strategy and Development Direction - The company is focused on reducing structural costs while advancing its Tricolor strategy and Network 2.0 [6] - A spin-off of FedEx Freight is on track for June 2026, aiming to create a separate public company [6][53] - The company is leveraging data and technology to enhance customer experience and operational efficiency [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience despite global trade volatility [5] - The outlook for full-year adjusted earnings is projected to be between $17.2 and $19 per diluted share [19][47] - Management remains focused on executing commercial priorities and dynamically matching capacity with demand [20] Other Important Information - The company achieved $200 million in transformation-related savings [7] - A new flight linking Dublin and Indianapolis is set to launch, supporting healthcare and high-value verticals [34] - The company plans to host its next Investor Day in February 2026 [21] Q&A Session Summary Question: Clarification on EPS range - Management indicated that the EPS range is influenced by various factors including global trade evolution and industrial economy health [56][58] Question: Incremental margin growth and headwinds - Management acknowledged the $1 billion headwind from the global trade environment, impacting operating income [60][62] Question: Data strategy and revenue models - The company emphasized the value of its data and AI capabilities, which are expected to create new revenue models [64][66] Question: Sequential earnings growth expectations - Management did not provide specific Q2 guidance but expressed cautious optimism for peak season demand [70][72] Question: Customer reaction to de minimis rule expiry - Management noted that the expiry has been challenging for small exporters, but they are actively supporting customers [107][108] Question: Peak season strength and market conditions - Management expects volume growth during peak season driven by new acquisitions and strong B2C demand [111][115]