FedEx reported Q4 revenue of $25.01 billion and earnings of $6.31 per share, driving 13% top-line growth and $4.7 billion in adjusted free cash flow for FY 2026. However, an $800 million variable compensation headwind, $200 million pilot agreement cost and $350 million stranded costs sparked a 6.5% stock drop.
FedEx delivered Q4 revenue of $25.01 billion and earnings of $6.31 per share, both above consensus. Consolidated revenue rose 13% year-over-year, while adjusted free cash flow reached $4.7 billion for fiscal 2026.
Business-to-business services, particularly in healthcare and data center logistics, accounted for the majority of top-line expansion, reflecting the company’s strategic focus on higher-margin segments.
Management flagged an $800 million variable compensation expense and a $200 million cost from a new pilot agreement. The recent FedEx Freight spin-off also left $350 million in stranded costs to be managed.
The company projected adjusted earnings of $16.90 to $18.10 per share for fiscal 2027, below analyst forecasts and prompting investor concerns. It does not expect to incur stranded costs beyond calendar year 2027.
