FedEx (FDX, Financial) recently released its fiscal Q2 2025 results, reporting $22 billion in revenue, slightly below market expectations of $22.1 billion. The company announced plans to spin off its freight division into an independent publicly traded company, aiming to streamline operations. Non-GAAP net income stood at $990 million, down from $1.01 billion the previous year, with adjusted earnings per share at $4.05, surpassing market expectations of $3.94.
FedEx shares surged 13% in after-hours trading. The stock has risen about 9% this year, underperforming the S&P 500's 23% gain. The freight division, which earned $9.4 billion last year, will be spun off within 18 months, enhancing operational focus and flexibility. This move positions FedEx Freight to compete with Old Dominion Freight Line Inc. and XPO Inc.
Despite the spin-off, FedEx lowered its full-year profit forecast due to weak demand in its U.S. express division. The company now expects adjusted earnings of $19 to $20 per share for fiscal 2025.
