FedEx 8-K
PositiveEarningsGuidance raised
Higher package yields and cost cuts lift CY2026 adjusted EPS outlook to $18.00–$18.60; $1.2B FedEx Freight investment loss weighs on GAAP earnings
Filed 2026-10-28 16:12 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q3 2026 results with a raised CY2026 earnings outlook. Continuing-operations revenue increased 12% Y/Y as higher package yields, package volumes and structural cost reductions outweighed higher purchased transportation and wage costs and trade-policy impacts. GAAP results include a $1.2B loss on FedEx’s retained FedEx Freight investment after its June spin-off. FedEx also completed the sale of FedEx Supply Chain for approximately $1.4B on 10/01/2026; parcel rates are scheduled to rise an average of 5.9% effective 1/4/2027.
Key Figures
| Metric | Q3 2026 | 9M 2026 |
|---|---|---|
| Revenue | $22.9B, +12% Y/Y | $66.6B, +12% Y/Y |
| Operating income (GAAP) | $1.07B, +10% Y/Y | $3.31B, +26% Y/Y |
| Operating income (non-GAAP) | $1.20B, +16% Y/Y | — |
| Operating margin (GAAP) | 4.7%, vs 4.8% | — |
| Operating margin (non-GAAP) | 5.3%, vs 5.1% | — |
| Income from continuing operations (GAAP) | $290M, -55% Y/Y | $7.08B, +238% Y/Y |
| Income from continuing operations (non-GAAP) | $896M, +29% Y/Y | — |
| Diluted EPS from continuing operations (GAAP) | $1.21, -56% Y/Y | $29.42, +236% Y/Y |
| Diluted EPS from continuing operations (non-GAAP) | $3.74, +28% Y/Y | — |
- U.S. domestic average daily package volume rose 2% and composite package yield rose 7% Y/Y. International volume fell 4%, while composite package yield rose 17% and average daily freight pounds rose 15%; higher yields and export activity supported segment results.
- 9M operating cash flow was $7.45B vs $6.64B. FedEx repurchased $2.0B of stock, approximately 6.3M shares, benefiting Q3 diluted EPS by $0.02; cash on hand was $8.0B, including $2.7B in tariff refunds held for customers. Another $4.3B remained available under its 2026 repurchase authorization.
- FedEx retained 19.9% of spun-off FedEx Freight, carried at $3.3B on 9/30/2026, and recorded a $1.2B quarterly loss on the investment. It used the approximately $4.1B dividend received from Freight plus cash on hand for tender offers covering approximately $4.9B principal amount of debt, recognizing a $627M non-GAAP pre-tax extinguishment gain.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Revenue growth | CY2026 | ≈12% Y/Y | ≈11% Y/Y | Raised |
| Diluted EPS from continuing operations (GAAP) | CY2026 | $35.30-$35.90 | $16.55-$17.75 | Raised |
| Adjusted diluted EPS from continuing operations (non-GAAP) | CY2026 | $18.00-$18.60 | $16.90-$18.10 | Raised |
| Effective tax rate | CY2026 | ≈22.5% | ≈23% | Lowered |
| Pension contributions | CY2026 | $475M | Unchanged | Reaffirmed |
| Capital spending | CY2026 | $3.9B | Unchanged | Reaffirmed |
As of 10/28/2026. The prior GAAP EPS range excluded impacts related to MTM accounting for the FedEx Freight investment and the debt extinguishment gain; the revised GAAP range includes those impacts and precedes additional CY2026 retirement-plan MTM adjustments. Adjusted EPS excludes MTM adjustments for retirement-plan accounting and the Freight investment, the debt gain, and restructuring costs. The ETR outlook excludes those MTM adjustments and a $263M deferred tax benefit related to the FedEx Supply Chain basis difference. The forecasts assume no additional adverse economic, geopolitical or international trade developments; capital spending prioritizes network optimization, fleet and facility modernization, and automation.
Investor Takeaways
- CY2026 revenue growth and EPS against the raised outlook will show whether higher yields and cost reductions can continue to offset wage, purchased-transportation and trade-policy pressures.
- Watch domestic and international package volumes and yields as the 5.9% parcel-rate increase takes effect on 1/4/2027; sustained yield gains alongside stable or improving volumes would support the quarter’s operating trends.
The summary is written by an AI model reading the filing.
Model 005 · prompt v111 · 2026-10-28 22:37:44Z