Investors had many questions heading into FedEx's fiscal third-quarter earnings. The company answered most of them, sending shares higher in late trading.

Thursday evening, FedEx announced fiscal third-quarter earnings per share of $5.25 from sales of $24 billion. Wall Street was looking for earnings per share of $4.15 from sales of $23.5 billion. A year ago, FedEx reported fiscal 2025 third-quarter earnings per share of $4.51 on sales of $22.2 billion.

Guidance went up, too. Management expects fiscal year earnings per share to be between $19.30 to $20.10. The prior range was $17.80 to $19.00. The new guidance implies fourth quarter earnings per share of $5.80. Wall Street currently projects $5.93.

FedEx stock was up 9% in after-hours trading at $388.56.

Higher U.S. domestic volumes, higher prices, and a strong peak shipping season led to the earnings beat. Higher volumes should encourage investors. The freight business has been mired in a three-year-long recession, with investors hoping for growth in 2026.

In "certain parts of the global demand landscape, there has been strengthening (i.e., China Exports and Retail Sales), while the drag effect of others has become less severe (i.e., Industrial Production)," wrote Evercore ISI analyst Jonathan Chappell in a preview report.

Things are getting better, which is one reason he recently raised his FedEx price target to $380 from $364. Chappell rates shares Hold.

Some threats to freight recovery have emerged, however, namely global conflict and $100-per-barrel oil prices. That has shown up in FedEx stock. Since the onset of fighting in Iran, FedEx's stock was down about 9% coming into Thursday trading. Still, that left shares up about 22% year to date.

FedEx still hasn't seen much improvement in export markets. Tariffs remain a headwind, and uncertainty remains. FedEx is suing for tariff recovery in the aftermath of the Supreme Court's decision declaring President Donald Trump's Liberation Day tariffs illegal. That, however, is mainly for customers, who were ultimately responsible for paying the levies. Exactly what will happen with refunds is still hard to say.

The quarter also came just ahead of the separation of FedEx's freight division, which competes with the likes of Old Dominion Freight Line. The spinoff is slated for early June.

FedEx investors and management hope the business trades at a higher valuation multiple after the spinoff. FedEx stock trades at about 16 times estimated calendar-year 2026 earnings, according to FactSet. Old Dominion trades for 35 times.