FedEx Corporation's split debut: Q4 operating profit plummeted, future will focus on high-profit niche markets.

FedEx Corporation Freight (FDXF.US) is expanding into new businesses such as data center infrastructure, fresh groceries, and healthcare in order to plan for its future as a new independent company. The company's CEO, John Smith, stated that before the recent spin-off from the package delivery giant FedEx Corporation (FDX.US), FedEx Corporation Freight had been building a specialized sales team over the past year to capture business in niche markets with historically less involvement but attractive profit margins. Smith stated in an interview on Thursday: "We are transitioning into a 'hunting phase' to pursue new business. Building this sales team has truly been a key differentiating advantage that has brought us from the past to the present." FedEx Corporation Freight is the largest less-than-truckload (LTL) freight provider in North America, focusing on transporting goods larger than parcels but smaller than full truckloads. Currently, as the trucking industry works to capture early signs of a recovery in freight rates following a long-term decline, the company is entering the market. Meanwhile, inflation and higher oil prices triggered by the Iran war are adding extra pressure. The logistics industry is also facing increasingly fierce competition from Amazon.com, Inc. (AMZN.US). Amazon.com, Inc. announced earlier this month that it is expanding its freight services, leading to a sharp drop in the stock prices of FedEx Corporation Freight and other LTL freight competitors. At the time of Smith's statement, the company released its financial report on Thursday after separating from the package giant. The report showed that the company's revenue for the fourth quarter was $2.4 billion, a 4.8% increase year-on-year; operating profit was $158 million, a 66.9% decrease year-on-year; adjusted operating profit was $363 million, a 23.9% decrease year-on-year. The operating profit margin was 6.6%, the adjusted operating profit margin was 15.1%, while the operating profit margin in the same period last year was 20.8%. FedEx Corporation Freight did not separately disclose earnings per share for the fourth quarter. The company stated that it cannot predict the mark-to-market (MTM) retirement plan accounting adjustments for the seven months ending December 31, 2026. Therefore, the company cannot provide GAAP-based earnings per share (EPS) or effective tax rate (ETR) outlook for the transition period (June 1, 2026, to December 31, 2026). Comparing to $5.1 billion for the seven months ending December 31, 2025, the company expects a revenue growth rate of 4% to 6%; adjusted earnings per share, excluding costs related to the spin-off, are expected to be between $2.40 and $2.60.