FedEx has reported strong year-over-year earnings growth for the second quarter of fiscal 2026, supported by higher package yields, rising U.S. domestic volumes and continued structural cost reductions, while reaffirming plans to spin off its FedEx Freight business on June 1, 2026.
For the quarter ended November 30, FedEx recorded revenue of US$23.5 billion, up from US$22.0 billion in the prior-year period. On a GAAP basis, operating income increased to US$1.38 billion from US$1.05 billion, while net income rose to US$0.96 billion, compared with US$0.74 billion a year earlier. Diluted earnings per share reached US$4.04, up from US$3.03. On an adjusted basis, which excludes items such as spin-off and business optimisation costs, diluted EPS was US$4.82.
Operating performance improved across the group, driven primarily by strength in U.S. domestic and International Priority package yields, ongoing Network 2.0 transformation savings and higher domestic package volumes. These gains were partially offset by higher wage rates, increased purchased transportation costs, the grounding of the MD-11 aircraft fleet and the impact of global trade policy changes.
The Federal Express segment delivered improved operating results during the quarter, while FedEx Freight reported lower operating income due to reduced shipment volumes and higher labour costs, partly offset by improved yield. FedEx Freight also incurred US$152 million in one-time spin-off related costs during the quarter.
FedEx confirmed that the planned separation of FedEx Freight remains on track, with the business expected to list as a standalone public company on the New York Stock Exchange under the ticker FDXF. An investor day for the new entity is scheduled for April 8, 2026.
Reflecting the quarter’s performance, FedEx raised its full-year fiscal 2026 outlook, now forecasting revenue growth of 5 to 6 per cent year on year. The company also increased its non-GAAP earnings guidance and reduced expected pension contributions, while reaffirming US$1 billion in permanent transformation-related cost savings and capital expenditure of US$4.5 billion focused on network optimisation and efficiency improvements.
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