FedEx Freight forecasts revenue growth for the rest of 2026
Weeks after completing its separation from FedEx Corp, FedEx Freight sets out growth targets for the remainder of 2026 as demand conditions in U.S. freight markets improve. The less-than-truckload carrier expects revenue for the seven months to Dec. 31 to rise 4% to 6%, while adjusted operating income is projected to increase 0.8% to 7.5%.
Highlights
- FedEx Freight, now a standalone company, forecasts adjusted operating income of $605 million to $645 million and EPS of $2.4 to $2.6 for June–December 2026.
- Revenue for the quarter ended May 31 rose 4.8% to $2.4 billion, beating LSEG's analyst consensus of $2.26 billion due to higher fuel surcharges and shipment weight.
- Despite higher freight rates and industrial demand, quarterly adjusted operating income dropped 23.9% amid separation costs, lower shipment volumes, and increased wages.
Outlook after spin-off and fiscal year change
As reported by Reuters, FedEx Freight says the seven-month forecast reflects a shift in its fiscal year-end to align with the calendar year, from its previous May year-end. The company, based in Memphis, began trading as a standalone business on June 1 after its separation from parent FedEx Corp.For the period from June through the end of December 2026, FedEx Freight forecasts adjusted operating income of $605 million to $645 million, compared with $600 million in the year-ago period. It also expects adjusted earnings per share for the June-to-December period of $2.4 to $2.6.
In the fourth quarter ended May 31, revenue rises 4.8% to $2.4 billion, supported by higher fuel surcharges and increased weight per shipment. That result exceeds analysts' expectation of $2.26 billion, according to data compiled by LSEG.
Freight market conditions and earnings pressure
FedEx Freight is the largest provider of less-than-truckload services in the U.S., a segment in which multiple shipments from different customers move through a network of service centers. Trucking companies in the sector point to stronger industrial demand, with U.S. manufacturing activity growing for the last five months and reaching a four-year high in May.Freight rates have also climbed in recent months as regulatory actions tighten available supply. Even so, FedEx Freight says quarterly adjusted operating income falls 23.9%, as separation-related costs, weaker shipment volumes and higher wages weigh on results.
Our earlier analysis of FedEx’s Q4 FY2026 results and FDX price outlook highlighted an earnings beat alongside major capital actions following the FedEx Freight spin-off. We noted that the spin-off boosted liquidity via a large cash dividend and supported shareholder returns, while technical signals pointed to a likely consolidation range despite a broadly constructive backdrop.
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