FedEx Freight: adjusted profit rises in a messy four-month transition
FedEx Freight's first standalone report is a tale of two numbers: adjusted operating income rose 16.4% while GAAP net income fell 49.5%. The gap is $127 million of spin-off costs plus a fuel surcharge inflating revenue. Read the sales growth as mostly fuel, and judge the business on the adjusted margin, which improved to 15.5% over the four months.
1 · Expected vs. Actual
Free preview belowGAAP diluted EPS was $0.98 for the quarter, down 49.7% from $1.95, and $1.54 for the four months, down 43.0%. Two items explain most of that: $105 million of spin-off costs in the quarter and the $98 million of related-party interest income the prior-year quarter collected. Excluding spin-off costs, quarterly EPS was $1.49 and four-month EPS was $2.15.
The three months ended September 30, 2026 produced $2.44 billion of revenue, up 8.1% from $2.26 billion a year earlier, while the four-month transition period came in at $3.28 billion, a 9.2% increase. Revenue per shipment rose 10.1%, but fuel surcharges accounted for $32.82 of the $37.87 increase per shipment. Excluding fuel, revenue per hundredweight was up just 0.3%.
For the three months ending December 31, 2026, management guides revenue of $2.30 billion to $2.37 billion, up 12.8% at the midpoint from $2.07 billion. Operating income is guided at $80 million to $100 million on a GAAP basis but $185 million to $205 million adjusted, with adjusted EPS of $0.65 to $0.75. That is an 8.0% to 8.6% adjusted operating margin, far below the 14.7% just reported for the third quarter.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-11-03
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