FedEx Freight Posts 9% Revenue Growth in First Standalone Quarter
FedEx Freight reported a 9% year-over-year revenue increase to $3.28 billion for the June-September transition period, its first as an independent company, though margins were pressured by spinoff costs.
FedEx Freight reported a 9.2% year-over-year revenue increase to $3.3 billion for its four-month transition period ended September 30, 2026. The nation's largest less-than-truckload carrier posted these results after market close on Thursday. Adjusted operating income rose 16.4% to $510 million, but reported earnings per share fell sharply due to one-time separation costs.
Key operating metrics for the period were as follows:
| Metric | Result | Year-over-Year Change |
|---|---|---|
| Revenue | $3.3 billion | +9.2% |
| Adjusted Operating Income | $510 million | +16.4% |
| Operating Margin | 11.7% | -190 basis points |
| Adjusted Operating Margin | 15.5% | +90 basis points |
| Diluted EPS | $1.54 | -43% |
| Adjusted Diluted EPS | $2.15 | -24.6% |
| Tonnage Per Day | 41.7 thousand tons | Flat |
| Average Daily Shipments | 88.9 thousand | -1.4% |
| Revenue Per Shipment | $413.00 | +10.1% |
| Revenue Per Hundredweight | $44.03 | +8.6% |
Spinoff context and business mix
The results cover the initial phase of the carrier's new corporate life. FedEx Freight completed its separation from its former parent in June. Since then, the company has repriced approximately 25% of its contract business. Management pointed to a supportive industrial backdrop, claiming September marked the ninth consecutive month of expansion for the U.S. manufacturing complex.
Volume dynamics and yield trends
Revenue growth was driven entirely by higher pricing, as volume slightly contracted. Shipments per day declined 1% compared to the same period last year. Weight per shipment increased 1%. The core yield metric, revenue per hundredweight excluding fuel surcharges, rose 0.3%. Revenue per shipment excluding fuel increased 2% year over year.
Outlook and guidance
The company provided detailed forecasts for the remainder of its transition period, which runs through December 31, 2026, and for its first standalone quarter in 2027. For the fourth quarter, FedEx Freight expects revenue between $2.30 billion and $2.37 billion, a midpoint increase of 13% year over year. Higher diesel fuel surcharges are a primary driver, given diesel prices were 48% higher year over year in the third quarter. Adjusted operating income is projected to rise 20% at the midpoint.
Looking ahead, the company's 2027 general rate increase is projected to average 6.9% and will take effect on January 8. Chief Financial Officer Marshall Witt indicated the initial phase of the turnaround is gaining traction. "The operational, commercial, and technology progress we achieved during the period is beginning to translate into tangible financial results," Witt said.
The company raised its full transition period revenue forecast to a range of $5.58 billion to $5.65 billion, above its original guidance. It also increased its adjusted operating income forecast to $695 million-$715 million. However, the forecast for the reported operating margin was lowered to 8.3%-8.6%, indicating expected compression from ongoing spinoff-related costs. The company ended the period with $388 million in cash and had repaid $100 million of debt ahead of schedule.
