By Lisa Baertlein and Abhinav Parmar
March 19 (Reuters) – FedEx, known for its air-dependent overnight deliveries, on Thursday raised its full-year profit forecast as it reported third-quarter profit and revenue above Wall Street estimates, helped by a surge in deliveries during the all-important holiday quarter.
Memphis-based FedEx, which earlier this month overtook UPS in market value for the first time, saw its shares rise 8% in after-hours trading. The company was valued at about $82.23 billion as of Wednesday’s close.
FedEx now expects adjusted profit for its fiscal year ending May 31 to be between $19.30 and $20.10 per share. Analysts, on average, expect FedEx to post full-year profit of $18.69 per share, according to data compiled by LSEG.
The company in December forecast annual profit of $17.80 to $19.00 per share.
FedEx said its outlook assumes no additional geopolitical disruptions, but the fallout from the U.S.-Israeli war on Iran, which has pushed air freight rates higher and forced carriers to reroute flights, could weigh on fourth-quarter performance.
About 8% of FedEx’s international export volume flows through hubs in the region, Stifel analysts said, highlighting its exposure to ongoing disruption.
FedEx said operating results in its Express unit improved in the third quarter, helped by stronger U.S. and international package pricing, higher domestic volumes and ongoing cost cuts.
The third-quarter “results were lifted by much higher yields, but this time much stronger U.S. ground volume also helped the top line,” Evercore ISI analyst Jonathan Chappell said.
“The cost savings from the network reorganization also continue to help expand margins, and all 3 added up to a very surprising beat,” he added.
The company said that gains were partly offset by higher wages and incentive pay, rising transportation costs, the impact of global trade policy changes, and the grounding of MD-11 aircraft.
Adjusted earnings for its crucial winter holiday quarter rose to $5.25 per share, beating analysts’ estimates of $4.14 per share, even as it absorbed millions in unexpected costs related to truck and plane replacements for its MD-11 fleet, which was grounded after a deadly UPS crash in November 2025.
FedEx had 28 Boeing MD-11 cargo jets in operation when the Federal Aviation Administration grounded the planes after the crash that killed 14 people, including three pilots on board.
Executives previously said they expect the company’s MD-11 fleet to return to service by the end of May.
The company also said that it now expects its full-year revenue to be up in the range of 6.0% to 6.5% year-over-year, compared to its previous forecast of growth between 5% and 6%.
FedEx is in a multi-year restructuring that includes slashing billions of dollars in costs, combining its distinct Ground and Express delivery options, automating some operations and spinning off its Freight trucking business on June 1.
FedEx posted revenue for the quarter ended February 28 of $24 billion, above analysts’ estimates of $23.43 billion.
(Reporting by Lisa Baertlein in Los Angeles and Abhinav Parmar in Bengaluru; Editing by Alan Barona)
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