FedEx (NYSE:FDX) shares dropped more than 6% in premarket trading on Wednesday after the logistics group issued a 2026 profit forecast that fell short of market expectations, overshadowing stronger-than-expected fourth-quarter earnings and revenue.
Fourth-Quarter Results Top Estimates
The package delivery company reported adjusted earnings of $6.31 per share for the fourth quarter, exceeding analyst expectations of $5.92 per share.
Revenue reached $25 billion during the period, ahead of the $24.01 billion consensus estimate, supported in part by higher shipping rates across its network.
The better-than-expected quarterly performance reflected ongoing efforts to improve efficiency and pricing, although investors remained focused on the company’s outlook for the year ahead.
Profit Guidance Falls Short of Expectations
FedEx forecast fiscal 2026 earnings per share in the range of $16.90 to $18.10.
While the guidance represents an improvement from calendar year 2025 earnings per share of $15.00, it came in well below Wall Street’s average forecast of $19.86 per share.
The company also projected revenue growth of approximately 11% during the coming year.
The weaker-than-anticipated earnings outlook prompted investors to reassess the pace of FedEx’s recovery and growth prospects.
Industry Faces Ongoing Market Headwinds
FedEx and competitor United Parcel Service continue to navigate a challenging environment marked by evolving U.S. trade policies and softer demand from the e-commerce sector.
One notable factor has been the removal of duty-free “de minimis” treatment for low-value imports associated with Chinese-linked online retailers such as Shein and Temu.
The policy change has weighed on shipping volumes tied to international online shopping, creating additional pressure on delivery companies that benefited from the rapid growth of cross-border e-commerce.
Management Highlights Transformation Progress
Despite the cautious earnings forecast, management emphasized the company’s ongoing strategic transformation efforts.
“As we look ahead, continued revenue and earnings growth momentum in our transition year positions us to unlock significant stockholder value through a resolute focus on driving unprecedented free cash flow growth,” said Claude Russ, FedEx Corp. enterprise vice president, finance and interim chief financial officer.
The company continues to focus on cost reductions, operational improvements and capital allocation initiatives designed to enhance long-term shareholder returns.
Analysts Point to Structural Improvements
Stifel analysts viewed the results positively despite the earnings guidance coming in below expectations.
They said the quarter “underscore success in its multi-lever transformation strategy, including the now-finalized spin-off of FedEx Freight.”
The analysts also noted that “CY26 guidance of $16.90-$18.10, was slightly below our prior comparable estimate of ~18.30 at the midpoint, but our forward numbers are coming up to reflect the positive momentum in the business.”
Their comments suggest that some market participants remain confident that operational improvements can continue to support earnings growth over time.
Investors Watching Premium Delivery Segment
While FedEx’s traditional package delivery operations continue to face weaker e-commerce demand, investors are increasingly focused on the performance of its higher-margin premium overnight delivery services.
Growth in that segment could help offset softness elsewhere in the business and provide a clearer path toward improved profitability.
The quarterly report also included results from the trucking division that FedEx separated earlier this month.
FedEx shares finished the regular trading session at $316.83 before the earnings announcement and initially fell around 4% in after-hours trading as investors reacted to the company’s outlook. The decline deepened in premarket trading as attention shifted toward the lower-than-expected earnings guidance.