FedEx Freight started on a bad foot with investors on Thursday when a technical glitch delayed a virtual presentation for analysts about its first earnings report as an independent company since being spun off from FedEx Corp. on June 1.
The less-than-truckload carrier said revenue increased 4.8% to $2.4 billion in the fiscal fourth quarter ended May 31 thanks to higher fuel surcharges and weight per shipment, beating expectations. The numbers were not new because they were included in FedEx’s earnings numbers on Tuesday.
New information came in the guidance. For the remaining seven months of the year FedEx Freight (NYSE: FDXF) is expected adjusted earnings per share of $2.40 to $2.60, excluding any spin off costs. It also forecasts 4% to 6% revenue growth compared to the same period last year and an operating margin of 9% to 9.5%, up from 7.8% growth in 2025.
Adjusted fourth-quarter operating income decreased 24% year over year to $363 million, with an operating margin of 15%. Results were impacted by separation costs, lower shipments, a gain from the sale of a terminal during the prior year and increased wage rates. Average daily shipments fell 5.9% to 86,700. Weight per shipment was 948 pounds, up 3%. Revenue per shipment of $415.22 represented an 11.5% increase.
FedEx Freight is the largest LTL company in the United States with a 17% market share, 355 service centers and about 30,000 vehicles. About two-thirds of its revenue comes from manufacturing, where growth has accelerated during the past five months. It has a dedicated sales force of more than 500 representatives.
Jefferies analyst Stephanie Moore wrote in a client note this week that FedEx Freight stands to significantly benefit from an industrial recovery because it has 30% spare capacity to soak up extra demand.
For the full year, revenue reached $8.8 billion, a 1.1% decline.
Earlier, FedEx Corp. announced it would reduce $4.1 billion in debt using cash provided by FedEx Freight under terms of the separation agreement.
FedEx Freight stock price dipped nearly 2% during the day and was down 1.2% in afterhours trading, with a price of $156.68 per share. It closed on June 1 at $149.53 per share.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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