FedEx Freight said on Thursday that it expected revenue for the seven months to December 31 to rise 4% to 6% and adjusted operating income to grow between 0.8% and 7.5%, weeks after completing its separation from parent FedEx Corp.
Memphis-based FedEx Freight is the largest provider of less-than-truckload (LTL) services in the U.S., wherein multiple shipments from different customers, carried on a single truck, are routed through a network of service centres, where they get transferred to other trucks with similar destinations.
Freight trucking companies have pointed to improved demand from the industrial sector, citing manufacturing activity in the U.S. that has grown for the last five months and hit a four-year high in May.
Freight rates have climbed over the last few months, as regulatory actions tightened supply.
The company provided targets for a seven-month period to account for the company's shifting its fiscal year-end to align with the calendar year, from its previous May year-end.
Its revenue rose 4.8% to $2.4 billion in the fourth quarter ending 31 May, driven by higher fuel surcharges and increased weight per shipment. The revenue topped analysts' expectation of $2.26 billion, according to data compiled by LSEG.
FedEx Freight was spun off from FedEx on 1 June, when it also made its trading debut.
Quarterly adjusted operating income, however, fell 23.9%, hurt by costs tied to its separation from FedEx, weaker shipments and higher wages.
For the rest of 2026, between June and December-end, FedEx Freight forecast adjusted operating income in the range of $605 million to $645 million, compared with $600 million in the year-ago period. It expects adjusted per-share earnings for the June-December period at $2.4 to $2.6.
(Reporting by Nandan Mandayam and Apratim Sarkar in Bengaluru; Editing by Shailesh Kuber and Sahal Muhammed)
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