FedEx Freight's first report as a standalone carrier: revenue up 9.2%, outlook raised

FedEx Freight posted its first results as an independent company on Oct. 29 and raised its outlook for the rest of 2026.

The Memphis-based less-than-truckload carrier reported on a one-time four-month period, June 1 through Sept. 30. It is moving to calendar-year reporting after its spin-off from FedEx Corp.

The period at a glance

| | Four months to Sept. 30, 2026 | Change vs. year earlier | |---|---|---| | Revenue | $3.281B | +9.2% | | Operating income | $383M | -6.1% | | Adjusted operating income | $510M | +16.4% | | Operating margin | 11.7% | -190 bps | | Adjusted operating margin | 15.5% | +90 bps | | Diluted EPS | $1.54 | -43% | | Adjusted diluted EPS | $2.15 | -24.6% |

Fewer shipments, more revenue per shipment

• Average daily shipments: 88,900, down 1.4%
• Tonnage per day: 41,700 tons, flat
• Revenue per shipment: $413.00, up 10.1%; excluding fuel, $318.23, up 1.6%
• Revenue per hundredweight: $44.03, up 8.6%; excluding fuel, $33.93, up 0.3%

The company said fuel surcharge revenue, heavier shipments, one extra operating day and higher base rates drove revenue. Softer volumes offset some of it.

Reported operating income fell because of costs related to the spin-off. On an adjusted basis, gains were partly offset by incentive and merit pay, transition service agreement costs tied to the spin-off, and higher IT costs to run as a standalone business.

FedEx Freight also said it hit a record-low claims ratio for the second quarter in a row.

Outlook raised

For the full transition period, June 1 to Dec. 31, the carrier now expects:

• revenue of $5.58 billion to $5.65 billion;
• adjusted operating income of $695 million to $715 million, up from $605 million to $645 million forecast earlier;
• adjusted EPS of $2.80 to $2.90, up from $2.40 to $2.60.

For the fourth quarter alone, it guided to revenue of $2.30 billion to $2.37 billion, against $2.07 billion a year earlier, and adjusted EPS of $0.65 to $0.75.

CFO Marshall Witt said the new outlook reflects "fuel tailwinds and slightly higher volume assumptions."

Cash and spending

FedEx Freight ended September with $388 million in cash and $1.6 billion in total liquidity. It repaid $100 million of debt early. Capital spending was $151 million in the four months; it expects about $365 million for June through December, on equipment, technology and facilities.

The company says it will announce a dividend and share buyback plan for 2027, subject to board approval.

"While we are in the early stages of our journey as an independent company, we are encouraged by the momentum we are seeing," said president and CEO John Smith.