FedEx Beats Quarterly Estimates but Issues Soft Holiday Outlook Amid Labor Headwinds
FedEx reported strong results for its July-to-September quarter, with revenue rising 12% year-over-year to $22.86 billion and adjusted EPS reaching $3.74, both exceeding analyst expectations. The company's performance reflects progress in CEO Raj Subramaniam's efficiency initiatives following the spin-off of its freight division. Despite the beat, shares fell in extended trading due to a cautious profit outlook for the October-to-December holiday quarter. FedEx expects mid-point EPS of $6.33, trailing consensus estimates of $6.58. Management cited 'transitory headwinds,' specifically rising costs for third-party transportation driven by a tight truck driver labor market and higher fuel expenses, which are expected to moderate domestic margins.
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