FedEx Corp. (NYSE: FDX) is preparing to report fourth-quarter earnings on Tuesday, June 24, at 4:00 pm ET. Recently, the management lowered its full-year earnings and revenue guidance for the third time citing economic uncertainties and slowing demand for higher-margin B2B services, reflecting continued weakness in the US industrial economy. The cautious outlook, set against a bleak tariff backdrop, weighed on investor sentiment leading to a stock selloff following the announcement.
Stock Performance
After slipping to a two-year low in April, the cargo giant’s stock is struggling to regain momentum, trading sharply below the record highs of July 2024. The value has dropped by a fifth in the past six months, and FDX underperformed the S&P 500 index during that period. Recently, the company hiked its dividend by 5% for fiscal 2026, offering a better-than-average yield of 2.6%, bringing cheer to shareholders.
When FedEx reports fourth-quarter 2025 results next week, Wall Street analysts will be expecting adjusted earnings of $5.91 per share on revenues of $21.81 billion. In the comparable quarter of fiscal 2024, the company reported earnings of $5.41 per share, excluding one-off items, and revenues of $22.1 billion. Its quarterly performance, relative to analysts’ estimates, has been inconsistent so far this year.
Key Metrics
In the third quarter, earnings climbed 17% from the year-ago period to $ $4.51 per share, excluding special items. Unadjusted net income rose to $909 million or $3.76 per share in the February quarter from $879 million or $3.51 per share in the year-ago quarter. It was driven by a 2% year-over-year increase in revenues to $22.2 billion. The top-line performance was restricted by a compressed peak season and unfavorable weather conditions. Revenue topped expectations while earnings fell short.
FedEx’s CEO Rajesh Subramaniam said during his post-earnings interaction with analysts, “We remain on track to achieve the $600 million in total DRIVE savings from Europe by the end of this fiscal year. In support of our network transformation, last month, we acquired RouteSmart Technologies, a global leader in route optimization solutions. This acquisition allows us to bring in-house a dynamic route mapping solution with a best-in-class algorithm. Our legacy ground business has used this technology with great success, and we are now rolling it out globally.”
Road Ahead
The FedEx leadership said it expects revenue to be flat to slightly down in fiscal 2025. Full-year adjusted profit is expected to be between $18.00 per share and $18.60 per share. The guidance for FY25 reported earnings, including special items, is $15.15-15.75 per share. Persistent uncertainties in the global economy, aggravated by geopolitical tensions, continue to disrupt international cargo movement, and parcel companies like FedEx face pricing pressure.
While the company effectively executes its growth strategy, focused on streamlining the business and cutting costs, the difficult macro environment and tariff-related supply restrictions continue to pose obstacles to growth. It is preparing to separate the FedEx Freight business and create a new publicly traded company, potentially unlocking significant value for stockholders.
FedEx’s stock is trading sideways ahead of the Q4 earnings, continuing to languish below its 52-week average price. On Monday, FDX opened lower and maintained the downtrend in early trading.