FedEx warns of $1 billion drop in operating profit
FedEx is bracing for a $1 billion drop in adjusted operating profit this year, mostly because shipping from China to the US has slowed down after new tariffs.
Plus, since August 29, the US dropped its rule that let goods under $800 come in duty-free—adding another $300 million in customs costs for FedEx.
Revenue will grow by 4-6%: FedEx
Losing the low-value exemption has made China-US shipping way less profitable—a big deal for FedEx's bottom line.
The company now predicts revenue will grow by 4-6% and expects earnings per share between $17.20 and $19.00 for fiscal 2026, which is a bit below what analysts hoped for.
FedEx is merging its air and ground teams
FedEx is merging its air and ground teams to save about $1 billion permanently.
It also bought back $500 million of its own shares earlier this year and plans more buybacks before the holidays.
Even though shares are down 19% this year, these changes are giving investors a little hope things could turn around.