Al Root
FedEx blew away Wall Street's earnings estimates. The stock is rising.
Thursday evening, FedEx announced fiscal third-quarter earnings per share of $5.25 from sales of $24 billion. Wall Street was looking for earnings per share of $4.15 from sales of $23.5 billion.
FedEx stock was up 2% shortly after results were released.
This is breaking news. Check back for updates. Read a preview of FedEx's earnings report below.
FedEx's earnings report comes at an odd time for the company. Investors expected a freight recovery in 2026, but that was before the Iran conflict, soaring oil prices, and the Supreme Court's decision to overturn President Donald Trump's Liberation Day tariffs.
There will be a lot for investors to untangle on Thursday afternoon, when FedEx announces its fiscal third-quarter numbers.
For the quarter, Wall Street is looking for earnings per share of $4.15 from sales of $23.5 billion. A year ago, FedEx reported fiscal 2025 third-quarter earnings per share of $4.51 on sales of $22.2 billion.
An earnings beat is always important. So is a look into the future. Currently, for the full year, which ends in May, FedEx expects earnings per share of between $17.80 to $19.00. If FedEx meets analysts' third-quarter estimates, it will need to generate fourth-quarter earnings per share of about $5.60 to hit the midpoint of its full-year guidance. Wall Street currently projects fourth-quarter earnings per share of $5.93.
Along with an update to guidance, investors will want to hear some qualitative commentary on markets. They hope for improvement.
In "certain parts of the global demand landscape, there has been strengthening (i.e., China Exports and Retail Sales), while the drag effect of others has become less severe (i.e., Industrial Production)," wrote Evercore ISI analyst Jonathan Chappell in a preview report. Things are getting better, which is one reason he recently raised his FedEx price target to $380 from $364. Chappell rates shares Hold.
Still, some threats to freight recovery have emerged, namely global conflict and $100-per-barrel oil prices. That has shown up in FedEx stock. Since the onset of fighting in Iran, FedEx's stock is down about 9% through Wednesday trading. Still, that left shares up about 22% year to date. Investors are still betting on recovery.
FedEx can typically offset higher energy prices with fuel surcharges, but higher shipping costs can still depress freight demand. How Iran and oil impact FedEx's business, and for how long, are key questions for investors.
They have a few others, too, including what will happen to tariff collections and recovery in the aftermath of the February Supreme Court decision declaring IEEPA tariffs illegal. FedEx is suing for recovery, but any funds recovered would likely flow to its customers, who were ultimately responsible for paying the tariffs.
The quarter also comes just ahead of the separation of FedEx's freight division, which competes with the likes of Old Dominion Freight Line. The spinoff should be completed by June.
FedEx investors and management hope that the business trades for a higher valuation multiple after being spun off. FedEx stock trades at about 16 times estimated calendar-year 2026 earnings, according to FactSet. Old Dominion trades for 35 times.
There is a lot to discuss. Hopefully, FedEx's report can help calm investors' frayed nerves.
FedEx stock dropped 1.4% on Wednesday, closing at $349.74, while the S&P 500 and Dow Jones Industrial Average fell 1.4% and 1.6%, respectively.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 19, 2026 16:16 ET (20:16 GMT)
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