FedEx earnings beat as margins improve and FY EPS guidance raised

FedEx has reported a robust second quarter performance that exceeded expectations across multiple metrics. The adjusted earnings per share (EPS) came in at $4.82, significantly higher than the consensus estimate of $4.12. Revenues were reported at $23.5 billion, surpassing forecasts of $22.8 billion, while adjusted operating income reached $1.61 billion, beating the anticipated $1.36 billion. The adjusted operating margin improved to 6.9%, exceeding expectations of 6.07%, driven by better cost absorption and productivity gains. Management highlighted the benefits of ongoing transformation efforts, including structural cost reductions and improved asset utilization. At the divisional level, Federal Express revenue was $20.43 billion, exceeding expectations of $19.72 billion, supported by improved yields. Looking ahead, FedEx raised the lower end of its full-year adjusted EPS guidance to a range of $17.80–$19.00 from a prior range of $17.20–$19.00, indicating confidence in operational momentum. Capital expenditure guidance remains unchanged at $4.5 billion. Overall, these results reinforce the narrative that FedEx's self-help measures are cushioning the impact of softer macro conditions.