Lou Whiteman, The Motley Fool

Wed, Jun 25, 2025, 6:24 AM4 min read

• FedEx beat Wall Street estimates, using cost control to grow earnings at a faster rate than revenue.

• The company expects to take an additional $1 billion in costs out in its new fiscal year and remains on track to spin off its trucking unit by next summer.

• Near-term volume issues are unlikely to be resolved quickly, as tariffs remain subject to continued negotiation.

• 10 stocks we like better than FedEx ›

Here's our initial take on FedEx's (NYSE: FDX) financial report.

EPS = earnings per share. BP = basis points.

FedEx and other shipping companies have been navigating through traffic in recent quarters. Fears of a slowing economy and, more recently, uncertainty about tariffs have caused large customers to pull back on shipping, depressing demand and volumes.

FedEx is controlling what it can, topping consensus expectations and posting 8% operating income and 12% adjusted earnings-per-share growth despite flat year-over-year revenue. The company said that cost benefits from its ongoing DRIVE restructuring initiative, coupled with increased U.S. and international export volume, and a higher yield base helped to drive improvement to operating results.

Operating margin increased by 60 basis points year over year to 9.1%.

This marks the end of FedEx's fiscal year. The company said it returned $4.3 billion to stockholders in its fiscal 2025 through stock repurchases and dividends, continuing a campaign that has pushed FedEx's share count down by 8% over the past five years.

The earnings report comes just days after the passing of Fred Smith, FedEx's founder and executive chairman. CEO Raj Subramaniam led the earnings release with a tribute to Smith, saying "his legacy of innovation, leadership, and philanthropy will continue to inspire future generations."

Current director R. Brad Martin was named the new board chair.

The results suggest that the macro headwinds that have plagued FedEx so far in 2025 are likely to continue in the months ahead. Shares of FedEx, already down 16% year to date heading into earnings, were down another 4% in aftermarket trading following the release but ahead of the company's call with investors.

FedEx is forecasting fiscal first-quarter revenue to be flat to up 2% and forecasted earnings of between $3.40 and $4.00. Even at the top end of that range, that is a disappointment relative to Wall Street's $4.03-per-share consensus estimate.