FedEx expects holiday quarter adjusted profit to top Wall Street's view

By Lisa Baertlein

Feb 12 (Reuters) - Global delivery company FedEx FDX.N said on Thursday adjusted earnings for the current holiday quarter would top Wall Street's average estimate and set growth targets through its fiscal year ending in May 2029.

Earnings for its third quarter ending February 28 will exceed analysts' consensus forecast, FedEx said ahead of its annual investor day in Memphis, where it is headquartered. FedEx used FactSet's $4.01 per share average estimate for that comparison.

In December, FedEx said its third-quarter adjusted earnings per share would fall below the second quarter's reported $4.82 per share. Earnings for the third quarter, typically the strongest due to the surge in holiday deliveries, will include $150 million in unexpected peak-season costs related to finding trucks and planes to move goods that would have flown on its fleet of MD-11 cargo planes that were grounded after a deadly UPS crash last month.

FedEx is in a multiyear restructuring that includes slashing billions of dollars in costs, combining its distinct Ground and Express delivery options, automating some operations and spinning off its Freight trucking business on June 1.

Executives set growth targets for fiscal 2029, which exclude FedEx Freight.

Using its fiscal 2026 estimate as a basis, it expects fiscal 2029 consolidated revenue of $98 billion, representing a 4% compound annual growth rate. On an adjusted basis, it sees 2029 operating income of $8 billion, a 14% CAGR. And it sees fiscal 2029 adjusted operating margin of 8%, up about 200 basis points.

For fiscal 2025, FedEx reported revenue of $87.9 billion, adjusted operating income of $6.12 billion and an adjusted operating margin of 7%.

Shares in FedEx rose 1.1% to $371.22 in midday trading.