FedEx reported improved consolidated operating results for the third quarter of 2026, helped by higher package yields, more shipments and continued savings from its business optimization initiatives. Adjusted financial measures excluding specified items for the quarter ended September 30, 2026 .
Revenue was $22.9 billion, compared with $20.4 billion in the year-earlier period. Reported operating income was $1.07 billion, up from $970 million, while adjusted operating income rose to $1.20 billion from $1.03 billion a year earlier. The adjusted operating margin also climbed to 5.3% from 5.1% a year earlier.
Adjusted net income rose to $900 million from $690 million and adjusted diluted earnings per share rose to $3.74 from $2.93. Conversely, reported net income declined to $290 million from $650 million and reported diluted earnings per share declined to $1.21 from $2.73. These differences are due to the impact of certain adjustment items on the company’s reported financial performance.
Third-quarter financial performance at a glance
The following figures compare FedEx’s reported GAAP results with its adjusted non-GAAP measures for the third quarters of 2026 and 2025.
| September 30, 2026 | September 30, 2025 | |||
|---|---|---|---|---|
| As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
|
| Revenue | $22.9 billion | $22.9 billion | $20.4 billion | $20.4 billion |
| Operating income | $1.07 billion | $1.20 billion | $0.97 billion | $1.03 billion |
| Operating margin | 4.7% | 5.3% | 4.8% | 5.1% |
| Net income | $0.29 billion | $0.90 billion | $0.65 billion | $0.69 billion |
| Diluted EPS | $1.21 | $3.74 | $2.73 | $2.93 |
“The company’s operating performance and adjusted free cash flow demonstrate our ability to compete in high-value market segments while optimizing our network,” said Raj Subramaniam, president and chief executive officer, FedEx. These results had underpinned an increase in the company’s outlook for the full year, he said.
The group is committed to operational discipline, lower cost to serve and profitable growth in its transformation, Subramaniam also said again. He said that FedEx had the strategy to stay ahead as a leading global provider of business-to-business parcel and air freight services, leverage digital knowledge to unlock new markets and create additional shareholder value through disciplined capital allocation.
Express operations improve at home and abroad
FedEx’s U.S. Domestic Express segment achieved higher operating income for the quarter. The improvement was driven by higher package yields, higher shipments, a more favorable service mix and ongoing cost savings from transformation efforts.
These increases were partially offset by increased transportation costs and increased salaries and benefits expenses.
Operations of the Express International segment also improved. Higher base yields, higher international export volumes and higher freight weights were the drivers of the positive performance.
These benefits are partially offset by higher wage rates, higher purchased transportation costs and the financial impact of changes in global trade policies.
FedEx Freight spin-off changes the financial standing of the group
FedEx spun off its FedEx Freight business on June 1, 2026, retaining a 19.9% stake in the stand-alone company.
In its third-quarter income statement, FedEx had a $1.2 billion loss in the line item “Gain/(loss) on short-term investment.” The group’s remaining equity interest was carried at $3.3 billion as of September 30, 2026 and classified as a short-term investment on the condensed consolidated balance sheets.
Following the separation, FedEx used approximately $4.1 billion of cash proceeds received on a dividend from FedEx Freight and available cash reserves to fund cash tender offers for approximately $4.9 billion of outstanding debt securities.
These transactions resulted in a non-GAAP pre-tax gain of $627 million, representing another financial milestone in the company’s transformation program.
FedEx Supply Chain sale advances strategic refocus
FedEx on Oct. 1, 2026, sold its unit FedEx Supply Chain to CMA CGM Group for about $1.4 billion.
The transaction is a further milestone in the continuous restructuring strategy of the group. FedEx is enhancing its strategic focus and commitment to profitable growth by streamlining its business portfolio and directing resources toward activities with greater long-term potential for value creation.
The Freight spin-off and Supply Chain divestiture are part of larger efforts to optimize the company’s operating structure, improve efficiency and sustain disciplined capital allocation.
FedEx’s most recent quarterly results reflect the benefits of improved yields, higher volumes and structural cost savings on its operating performance. The company is continuing its transformation, focusing on operational execution, strategic investment and sustainable shareholder value creation.
