FedEx Shares Jump After Topping Fiscal Q1 Expectations
Strong domestic demand and cost-saving initiatives helped the logistics giant overcome weaker international export volumes.
FedEx (FDX) shares climbed in pre-market trading after the company reported fiscal first-quarter earnings and revenue that surpassed Wall Street expectations, signaling that its extensive operational overhaul is yielding positive results.
The global logistics company announced an , comfortably beating the consensus analyst estimate of $3.65. Revenue for the quarter reached $22.24 billion, a 3.1% increase from the prior year and ahead of the anticipated $21.78 billion. The performance drove the stock up over 3% in pre-market activity as investors reacted positively to the news.
The strong results were fueled by robust performance in its U.S. domestic package segment and continued benefits from the company's DRIVE transformation program, a sweeping initiative aimed at improving efficiency and reducing structural costs. These gains successfully offset significant headwinds, including decreased international export demand and the recent expiration of its U.S. Postal Service contract, a development that had previously raised investor concerns.
In its official announcement, FedEx confirmed that its thanks to higher yields and cost savings. On a consolidated basis, the company's adjusted operating income grew 7% year-over-year, with the adjusted operating margin expanding by 20 basis points.
Wall Street analysts reacted with cautious optimism. Susquehanna raised its price target on FDX shares to $300 from $285, maintaining a 'Positive' rating. Analysts at Stifel, while slightly lowering their target, noted the earnings beat was a sign that the company's Network 2.0 overhaul is producing tangible results and could represent a .
Looking ahead, FedEx reinstated its full-year fiscal 2026 revenue growth forecast of 4% to 6%, a sign of confidence from management despite acknowledging a potential $1 billion impact from global trade uncertainty. The company remains focused on its cost-control measures, aiming to achieve an additional $1 billion in savings for the fiscal year. During the quarter, the company also repurchased $500 million of its own shares, underscoring its commitment to delivering shareholder value.