FedEx Freight raises revenue forecast for transition period to December

FedEx Freight Holding Company, Inc. (FDXF) said in a filing that revenue for its four-month transition period ended Sept. 30, 2026 was $3.3 billion, up 9.2% from a year earlier.

Adjusted diluted earnings per share were $2.15, down 24.6%. GAAP diluted earnings per share were $1.54, down 43%. The period includes June and the three months ended Sept. 30, following the company's spin-off from FedEx Corporation on June 1, 2026.

After the spin-off, the company changed its fiscal year-end from May 31 to Dec. 31.

Here's how the company did:

• Revenue: $3.3 billion vs. $3.0 billion a year earlier
• Operating income: $383 million vs. $408 million a year earlier
• Adjusted operating income: $510 million vs. $438 million a year earlier
• Diluted EPS: $1.54 vs. $2.70 a year earlier
• Adjusted diluted EPS: $2.15 vs. $2.85 a year earlier

The company said revenue rose primarily on favorable fuel surcharge revenue, higher weight per shipment, an additional operating day, and higher base revenue per hundredweight. Softer volumes partly offset those gains. Average daily shipments were 88.9 thousand, down 1.4%.

"Underlying performance was largely in line with our expectations as our initiatives are strengthening the foundation for improved growth and profitability," said Chief Financial Officer Marshall Witt.

Transition-period forecast

For the transition period, the company now forecasts revenue of $5.58 billion to $5.65 billion. The prior guidance was 4% to 6% revenue growth.

It forecasts adjusted operating income of $695 million to $715 million, compared with the prior forecast of $605 million to $645 million.

It forecasts operating income of $465 million to $485 million, compared with the prior forecast of $475 million to $515 million.

Diluted EPS is forecast at $2.80 to $2.90 after excluding costs related to the spin-off, compared with the prior forecast of $2.40 to $2.60.

The company is unable to forecast mark-to-market retirement plan accounting adjustments for the transition period. It therefore gave no GAAP EPS or effective tax rate outlook, and said those adjustments could have a material effect on its results.

Three-month outlook

For the three months ending Dec. 31, 2026, the company forecasts revenue of $2.30 billion to $2.37 billion, compared with $2.07 billion a year earlier.

It forecasts operating income of $80 million to $100 million, compared with a loss of $14 million in the same period of 2025. Adjusted operating income is forecast at $185 million to $205 million, compared with $162 million.

Diluted EPS is forecast at 15 cents to 25 cents before mark-to-market adjustments, and 65 cents to 75 cents after excluding spin-off costs. The prior-year figures were 39 cents and $1.27, respectively.

Costs and cash

Separation and other costs were $127 million for the four months. Capital expenditures were $151 million for the four months, and the company expects about $365 million for the transition period.

As of Sept. 30, the company had $388 million of cash and total liquidity of $1.6 billion. It repaid $100 million of debt ahead of schedule.

Capital returns

The company said it is on track to announce a dividend and share repurchase plan for calendar 2027, subject to board approval.

CEO John Smith said the company's "first four months as a standalone company reflect solid execution across the organization." The company describes itself as North America's largest less-than-truckload carrier, with nearly 30,000 vehicles and 40,000 dedicated team members.