FedEx (FDX) stock plummeted 5.01% in after-hours trading on Tuesday, despite reporting better-than-expected fourth-quarter earnings. The sharp decline came as the shipping giant provided weaker-than-anticipated guidance for the first quarter of fiscal year 2026, overshadowing its Q4 performance.

For the fourth quarter ended May 31, FedEx reported adjusted earnings per share of $6.07, surpassing the analysts' consensus estimate of $5.87. Revenue for the quarter came in at $22.2 billion, also beating expectations of $21.8 billion. The company's Q4 results demonstrated its ability to navigate through a challenging economic environment and deliver solid performance.

However, investors seemed more focused on FedEx's outlook for the coming quarter. The company forecast first-quarter adjusted earnings per share in the range of $3.40 to $4.00, falling short of the $4.06 analysts were expecting. FedEx also projected Q1 revenue growth to be flat to up 2% year-over-year, citing an uncertain global demand environment. In an unusual move, the company only provided guidance for the first quarter, stating it would resume full-year outlook disclosures as visibility improves.

Despite the near-term headwinds, FedEx announced it is targeting $1 billion in cost savings from its transformation programs during fiscal year 2026. The company also set its capital spending forecast for FY2026 at $4.5 billion, as it continues to invest in efficiency improvements and network optimization.