FedEx Corporation reported its financial results for the third quarter and nine months ended February 28, 2025, revealing a modest increase in revenue but a decline in profitability compared to the previous fiscal period. The company generated $22.16 billion in revenue for the third quarter, a 2% increase from $21.74 billion in the same period last year. For the nine months, revenue remained relatively flat at $65.71 billion, compared to $65.58 billion in the prior year. However, net income for the third quarter rose to $909 million, a 3% increase from $879 million, while net income for the nine months decreased by 14% to $2.44 billion from $2.86 billion.
The results reflect significant operational challenges, particularly in the FedEx Freight segment, which experienced a 23% decline in operating income for both the third quarter and the nine-month period. This downturn was attributed to lower shipment volumes and increased operating expenses, including higher purchased transportation and wage rates. The Federal Express segment, however, saw a 10% increase in operating income for the third quarter, driven by improved base yields and higher demand for U.S. ground and international export package services.
Strategically, FedEx has been undergoing a consolidation plan, merging FedEx Ground and FedEx Corporate Services into Federal Express as of June 1, 2024. This move aims to create a unified air-ground express network. Additionally, the company announced plans to spin off FedEx Freight into a separate publicly traded entity by June 2026, which is expected to be tax-free for shareholders. The spin-off is anticipated to enhance operational focus and financial flexibility for both companies.
Operationally, FedEx reported a decrease in average daily shipments in the FedEx Freight segment, which fell by 5% in both the third quarter and nine months of 2025. In contrast, the Federal Express segment saw an increase in average daily package volume, particularly in the U.S. ground home delivery segment, which rose by 11% in the third quarter. The company also incurred $179 million in business optimization costs during the third quarter as part of its DRIVE initiative aimed at improving long-term profitability.
Looking ahead, FedEx anticipates continued pressure on revenue due to macroeconomic conditions, including inflation and uncertainty in international trade. The company expects to maintain its focus on cost management and efficiency improvements through its DRIVE program while navigating the challenges posed by the expiration of its contract with the U.S. Postal Service and one fewer operating day in the fourth quarter. Capital expenditures for 2025 are projected to be approximately $4.9 billion, reflecting a strategic reduction in capital intensity relative to revenue.
About FEDEX CORP
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