FedEx Q4 Revenue of $25.01B Beats Estimates, Flags $1.15B Expense Headwinds
NSC•FedEx posted Q4 revenue of $25.01 billion and EPS of $6.31, driven by 13% consolidated sales growth led by B2B services. It forecast FY27 adjusted EPS of $16.90 to $18.10 and flagged $800 million in variable compensation headwind plus $350 million in stranded costs.
1. Q4 Performance
FedEx reported Q4 revenue of $25.01 billion and earnings of $6.31 per share, marking a 13% rise in consolidated sales driven primarily by B2B services. The company also generated $4.7 billion in adjusted free cash flow for the fiscal year, underscoring strong cash generation.
2. FY27 Guidance
For fiscal 2027, FedEx guided adjusted earnings to a range of $16.90 to $18.10 per share, falling short of analyst models and triggering a 6.5% drop in after-hours trading. The guidance shift shifts investor focus from topline growth toward profit sustainability.
3. Cost Pressures
FedEx outlined significant expense headwinds, including an $800 million variable compensation increase, a $200 million impact from a new pilot agreement and $350 million in stranded costs from the FedEx Freight spin-off. Management expects to eliminate or absorb stranded costs by year-end 2027.
