Dec 18 (Reuters) - FedEx posted second-quarter profit and revenue above Wall Street's estimates on Thursday and lifted the low end of its full-year earnings outlook, as peak-season pricing actions and cost-cutting efforts helped offset softer shipment volumes.
The Memphis-based package delivery company reported an adjusted profit of $1.14 billion, or $4.82 per share, for the second quarter ended November 30, up from $990 million, or $4.05 per share, a year earlier. Analysts, on average, were expecting a profit of $4.11 per share, according to data compiled by LSEG.
Shares of the company were up 1.9% to $292.70 in after-hours trading.
FedEx has been pursuing a multi-year cost overhaul since 2023, aiming to take billions out of its operating base by idling aircraft, shuttering sites and integrating its formerly separate Ground and Express operations. For the fiscal year ending in May 2026, the company is targeting an additional $1 billion in savings.
"We successfully executed our growth strategy and advanced our network transformation, while navigating a highly challenging external environment," CEO Raj Subramaniam said.
U.S. manufacturing contracted for the ninth consecutive month in November, signaling weaker volumes for FedEx, which relies heavily on business-to-business shipments linked to industrial activity.
Results at the company's Express segment improved in the quarter, driven by higher U.S. domestic and international priority package yields, which were partially offset by the financial impact of global trade policy changes and the grounding of the MD-11 aircraft fleet, FedEx said.
However, operating results at FedEx Freight, which is on track to spin off on June 1, 2026, decreased during the quarter due to lower shipments and higher wage rates, the company said.
FedEx and rival UPS are viewed as barometers of the global economy, given their broad customer base across industries and geographies.
FedEX now projects annual profit of $17.80 to $19.00 per share, raising the low end of its previous $17.20 to $19.00 range. The midpoint of the updated forecast also tops the analysts' average estimate of $18.22 per share.
It also lifted its 2026 revenue outlook, calling for 5% to 6% year-over-year growth, versus its earlier forecast of 4% to 6%.
Second-quarter revenue climbed to $23.5 billion, above estimates of $22.79 billion, extending the company's recent sales rebound.
FedEx also reaffirmed its capital spending and cost-savings plans for 2026.
Its freight division, once separated, will start trading on the New York Stock Exchange under the ticker symbol "FDXF" and will host an investor day in New York City on April 8, 2026, FedEx said.