FedEx shares rise premarket as cost-cutting helps results top expectations

Investing.com - Shares of FedEx rose in premarket U.S. trading on Friday after the shipping group reported quarterly profit above Wall Street expectations and issued a full-year outlook that brackets analyst estimates.

Memphis-based FedEx was bolstered by a drive to bring down costs, which helped to counterbalance soft international volumes following the end of a tariff exemption for certain low-value products sent directly to consumers.

As part of a bid to slash expenses by $1 billion during its current fiscal year, FedEx has moved to shutter facilities, restructure divisions and park planes. The changes, along with indications of consumer resilience during a time of concern over tariff-fueled price hikes, gave lift to the company’s closely-monitored operating margin.

The company posted first-quarter earnings of $3.83 per share, beating analysts’ average forecast of $3.68, on revenue of $22.2 billion. That compared with consensus estimates of $21.69 billion.

For fiscal 2026, FedEx forecast earnings per share of $17.20 to $19.00, against Wall Street’s $18.25 estimate.

Excluding certain accounting and restructuring costs, earnings are expected at $14.20 to $16.00 per share.

The company projected revenue growth of 4% to 6% year-on-year and said it would keep capital spending at $4.5 billion, with emphasis on network optimization and automation.

FedEx cut its expected pension contributions to as much as $400 million from a prior $600 million, and kept its forecast for a 25% effective tax rate.

The guidance assumes no major shocks to the economy, fuel costs or trade flows.

“Our first quarter results demonstrate our commitment to improving stockholder returns while executing on our strategic initiatives,” Chief Financial Officer John Dietrich said in a statement.

The latest figures come after FedEx issued disappointing earnings and declined to give a full-year profit outlook in June, citing volatility in the global demand environment.

"Coming after the fourth-quarter double-whammy of a miss and no guide, we’re pleased by the fiscal first-quarter results, which came in better than feared and also came with an full-year 2026 outlook to help investors frame earnings expectations for the year," analysts at Jefferies said in a note.

(Scott Kanowsky contributed reporting.)