FedEx Freight Q4 Operating Income Down 66.9% on $205m Spinoff Costs
FDX•FedEx Freight’s first standalone quarter saw operating income plunge 66.9% to $158m, hit by $205m in spinoff charges, while adjusted income fell 24% to $363m on $2.4bn revenue, +4.8% despite a 5.9% volume drop. It guided July–December growth of 4%–6% in revenue and $2.40–$2.60 adjusted EPS.
1. Q4 Results
For the quarter ended May 31, FedEx Freight reported operating income of $158 million, down 66.9% year-over-year due to $205 million in separation-related charges. Adjusted operating income, excluding those charges, totaled $363 million, a 24% decline, on revenue of $2.4 billion, up 4.8% despite a 5.9% drop in shipment volume driven by fuel surcharges and heavier average loads.
2. Full-Year Performance
For the full fiscal year, operating income fell 58.6% to $616 million, while revenue slipped 1.1% to $8.8 billion as the newly independent Freight segment absorbed separation costs and volume headwinds.
3. Transition Guidance and Strategy
FedEx Freight projected 4%–6% revenue growth and $2.40–$2.60 adjusted EPS for the July–December transition period as it shifts to a calendar fiscal year. Management plans to target new verticals such as data center construction, grocery distribution and healthcare following its June 1 listing and a $4.1 billion dividend transfer to FedEx Corporation.
