FedEx Corporation — Q1 & Q2 2026 (Transition Period) Earnings Summary

Financial Performance:

• Total revenue for the First Quarter 2026 was $20,788 million, increasing to $22,930 million in the Second Quarter 2026.
• Total operating expenses were $19,869 million in Q1 and $21,603 million in Q2.
• Total operating income was $919 million in Q1 and $1,327 million in Q2.
• Income from continuing operations was $719 million in Q1 and $6,074 million in Q2.
• Net income was $776 million in Q1 and $6,129 million in Q2.
• Diluted earnings per share (EPS) from continuing operations were $2.99 in Q1 and $25.05 in Q2.
• Diluted EPS including discontinued operations were $3.22 in Q1 and $25.28 in Q2.
• Non-GAAP diluted EPS for Q1 was $3.25, and for Q2 was $4.98.
• Dividends declared per common share were $1.44 in Q1 and $1.19 in Q2.
• Fuel expenses were $820 million in Q1 and $1,344 million in Q2.
• Purchased transportation expenses were $5,373 million in Q1 and $6,125 million in Q2.

Guidance and Future Outlook:

• FedEx will report operating results on a calendar-year basis beginning with the fiscal year ending December 31, 2027.
• Operating days for the quarters ending September 30 and December 31, 2026, are expected to be 64 and 64, respectively.
• Operating days for the quarters ending March 31, June 30, September 30, and December 31, 2027, are expected to be 63, 64, 64, and 63, respectively.
• The company references a goal of carbon-neutral operations by 2040.
• Forward-looking statements mention expectations regarding cost savings, future financial targets, and the 2029 financial performance targets.

Business Segments and Product Lines:

• Express U.S. Domestic Segment:
  • Revenue was $13,553 million in Q1 and $14,927 million in Q2.
  • Operating income was $880 million in Q1 and $1,379 million in Q2.
  • Operating margins were 6.5% in Q1 and 9.2% in Q2.
  • Total U.S. domestic average daily package volume (ADV) was 13,716 thousand in Q1 and 14,317 thousand in Q2.
  • Total U.S. domestic composite yield was $15.04 in Q1 and $15.65 in Q2.
  • U.S. Ground revenue was $8,764 million in Q1 and $9,777 million in Q2.
• Express International Segment:
  • Revenue was $6,571 million in Q1 and $7,335 million in Q2.
  • Operating income was $119 million in Q1 and $108 million in Q2.
  • Operating margins were 1.8% in Q1 and 1.5% in Q2.
  • Total ADV was 2,851 thousand in Q1 and 2,854 thousand in Q2.
  • Composite package yield was $27.73 in Q1 and $29.98 in Q2.
  • International priority revenue was $2,373 million in Q1 and $2,694 million in Q2.
• Corporate, Other, and Eliminations:
  • Revenue was $664 million in Q1 and $668 million in Q2.
  • Operating loss was $80 million in Q1 and $160 million in Q2.
• Segment Realignment:
  • The Federal Express segment was split into Express U.S. Domestic and Express International.
  • FedEx Logistics was moved from Corporate, other, and eliminations to Express International.
  • Certain data and technology expenses previously recorded under FedEx Dataworks were reclassified into the U.S. Domestic segment.

Market and Competitive Landscape:

• The document notes intense competition as a risk factor but does not provide specific market share data or competitor comparisons.
• The company references the future rate of e-commerce growth as a factor influencing operations.

Risks and Challenges:

• Risks include economic conditions, global trade volatility, and geopolitical conflicts (Russia/Ukraine, Middle East).
• Potential disruption from the FedEx Freight Spin-Off, including changes to business relationships and litigation.
• Risks related to labor disruptions, purchased transportation provider performance, and fuel price increases.
• Potential data breaches, technology failures, and regulatory changes affecting aircraft utilization.
• Risks associated with self-insurance accruals, accounts receivable collection, and tariff-related judicial rulings.
• The possibility of noncash impairment charges related to goodwill and deferred tax assets.

Management Commentary and Tone:

• The document states that the changes in reporting structure and fiscal year end had no impact on consolidated results of operations or financial position.
• Management views the business segments and non-GAAP financial measures as consistent with how they assess performance and allocate resources.
• The company expects reductions in stranded costs through transition services agreements and cost management following the FedEx Freight Spin-Off.

Other Key Points:

• Fiscal Year Change: Effective June 1, 2026, FedEx changed its fiscal year-end from May 31 to December 31, resulting in a seven-month transition period (June 1, 2026, through December 31, 2026).
• FedEx Freight Spin-Off: Completed on June 1, 2026, FedEx spun off its less-than-truckload freight transportation services (FedEx Freight) into a new publicly traded company. FedEx retained a 19.9% ownership interest. FedEx Freight is presented as discontinued operations.
• FedEx Supply Chain Sale: On October 1, 2026, FedEx completed the sale of its FedEx Supply Chain business to CMA CGM Group for $1.4 billion.
• Non-GAAP Adjustments: Q2 2026 included a $4,492 million gain on the retained investment in FedEx Freight and a $604 million MTM retirement plans accounting adjustment. Q1 included $82 million in restructuring, exit, and other costs.
• Discontinued Operations: Income from discontinued operations was $57 million in Q1 and $55 million in Q2.
• Other Income (Expense): Other nonoperating, net, was $(14) million in Q1 and $4,533 million in Q2. Other retirement plans income was $56 million in Q1 and $839 million in Q2.