FedEx beats revenue and EPS expectations in Q4, but shares drop due to cautious Q1 guidance.

From Yahoo Finance: 2025-06-25 10:27:00

FedEx had a strong finish in fiscal 2025, beating Wall Street expectations with $22.2 billion in revenue and $6.07 earnings per share. Despite this, shares dropped due to cautious guidance for Q1 2026. The company focuses on B2B, small businesses, and international markets for growth.

FedEx is emphasizing business-to-business logistics, small businesses, and international markets for growth. They’re concentrating on verticals like healthcare and automotive, with $9 billion in healthcare revenue and a dedicated automotive team targeting the premium North American market. The company is also seeing success with its FedEx Rewards loyalty program for small businesses.

FedEx is returning capital to shareholders through dividends and share repurchases, showing a commitment to shareholder value. They’re reducing capital expenditures while investing in fleet modernization and network automation. The company’s plan to spin out its Freight division is expected to unlock value.

Challenges lie ahead for FedEx due to macroeconomic issues like the end of duty-free treatment on low-cost imports from China. These challenges, along with softer global demand, could impact the stock’s recovery. While analysts are cautiously optimistic about FedEx’s future, headwinds may limit short-term upside.

Read more: FedEx Stock Drops After Q4 Earnings. Should You Buy the Dip or Steer Clear?