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Feb 28
FedEx Q3 2025 Earnings Report
FedEx reported its third quarter fiscal 2025 results with revenue of $22.2 billion, achieving EPS growth and improved operating income.
Key Takeaways
FedEx delivered third quarter fiscal 2025 revenue of $22.2 billion, with GAAP net income of $910 million and diluted EPS of $3.76. Adjusted EPS reached $4.51, supported by higher base yields, cost reduction initiatives, and increased volumes at Federal Express. Despite facing a compressed peak season and severe weather events, FedEx completed $500 million in share repurchases and maintained solid financial performance.
Revenue totaled $22.2 billion, up from $21.7 billion in the prior year.
GAAP net income was $910 million, with diluted EPS of $3.76.
Adjusted net income reached $1.09 billion, with adjusted EPS of $4.51.
Strong progress on cost reduction and operational improvements through the DRIVE program.
FedEx
FedEx
Forward Guidance
FedEx revised its fiscal 2025 outlook, expecting lower revenue and EPS due to continued uncertainty in the U.S. industrial economy, while reaffirming its cost-reduction targets and capital spending focus.
Positive Outlook
- Targeting diluted EPS of $18.00 to $18.60 excluding specific costs.
- Capital spending forecast lowered to $4.9 billion, focusing on network optimization.
- Permanent cost reductions from DRIVE program expected to reach $2.2 billion.
- Reaffirmed ETR guidance of approximately 24.0%.
- Continued focus on fleet and facility modernization and automation.
Challenges Ahead
- Revenue expected to be flat to slightly down year-over-year.
- EPS forecast revised down from previous guidance.
- Ongoing weakness in U.S. industrial economy constraining B2B demand.
- Expiration of USPS contract impacting Federal Express segment revenue.
- Higher purchased transportation and wage rates could affect margins.