FedEx Freight Sees 4%–6% Revenue Growth, Q4 Margin Slumps to 6.6%
FDX•FedEx Freight, spun off from FedEx Corp. on June 1, forecasted 4%–6% revenue growth and $475M–$515M operating income (adjusted $605M–$645M, EPS $2.40–$2.60) for the July–December transition period. In Q4 ended May 31, operating income plunged 66.9% to $158M and margin narrowed to 6.6% from 20.8%.
1. Spin-Off and Guidance
FedEx Freight began trading independently on June 1 following its separation from FedEx Corp. The newly public less-than-truckload carrier projected revenue growth of 4%–6% and operating income of $475M–$515M for the July–December transition, with adjusted operating income of $605M–$645M and EPS of $2.40–$2.60, excluding spin-off expenses.
2. Q4 Financial Performance
In the fiscal fourth quarter ended May 31, operating income fell 66.9% to $158M and adjusted operating income declined 23.9% to $363M. Revenue rose 4.8% to $2.4B, but average daily shipments dropped 5.9%, while revenue per shipment climbed 11.5% and revenue per hundredweight gained 8.2%.
3. Full-Year Results
For the fiscal year, revenue slipped 1.1% to $8.8B and operating income dropped 58.6% to $616M. Adjusted operating income fell 25.6% to about $1.1B, narrowing the operating margin to 7.0% from 16.7% in the prior year.
4. Strategic Outlook
Leadership highlighted a focus on profitable growth, service differentiation, network scale and cost discipline to drive cash-flow generation. The company also shifted its fiscal year-end from May 31 to December 31, assuming stable economic and trade conditions for its forecasts.
