FedEx Outpaces UPS in Growth, While UPS May Offer Better Margin Potential
On August 20, both FedEx Corporation (FDX) and United Parcel Service (UPS) secured $2.72 billion defense contracts under the Next Generation Delivery Service-2 program through September 2030, providing stable revenue streams for years to come. However, their financial performance tells a different story: in fiscal Q4 2026, FedEx reported a strong 13% year-over-year revenue increase and adjusted EPS of $6.31, while also surpassing its cost-savings target under the DRIVE program. With its Freight unit spun off by June 2026, FedEx is projecting ~11% top-line growth for calendar year 2026 with an adjusted EPS range between $16.90 and $18.10. UPS showed improvement in Q2 2026 after a slow start to the year, reporting consolidated revenue up 7.6% year-over-year to $22.8 billion and raising its full-year guidance for both revenue (~$91.2 billion) and adjusted EPS (~$7.22). UPS also announced over $2 billion in investments through 2028 across International, Healthcare, and Supply Chain Solutions segments, aiming to shift toward higher-margin sectors like healthcare logistics.
Topics: Defense Contracts Logistics Margin Expansion Revenue Growth