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 that adjusted earnings for the current holiday quarter would top Wall Street's average estimate and it also set growth targets through calendar year 2029.

Earnings for its third quarter ending February 28 will exceed analysts' consensus forecast, FedEx said ahead of its annual investor day in Memphis, Tennessee, 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. 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 in November 2025.

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.

"This will translate our transformation into profitable growth, higher margins, stronger cash generation and increased returns," CEO Raj Subramaniam told investors.

To that end, FedEx set growth targets for calendar 2029, which exclude FedEx Freight.

Using its estimates for fiscal 2026 as a basis, it expects 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 2029 adjusted operating margin of 8%, up about 200 basis points.

"We're religiously focused on cost," said Chief Financial Officer John Dietrich, who added that would position the company to manage unexpected challenges.

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 of FedEx were up 0.2% at $367.83 on Thursday afternoon.