Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

FedEx’s Q3 Earnings Call: Our Top 5 Analyst Questions

FDX Cover Image

FedEx’s third quarter performance reflected steady execution in the face of persistent global trade volatility and structural industry shifts. Management credited U.S. domestic parcel growth and disciplined cost management as key drivers, with CEO Rajesh Subramaniam highlighting “profitable share growth in the U.S. domestic market” and improved pricing discipline. Despite headwinds from reduced international export demand and the expiration of a major U.S. Postal Service contract, the company maintained operating margin stability. Management emphasized ongoing transformation initiatives, including network optimization and new business wins in high-value verticals, as supporting factors for the quarter.

Is now the time to buy FDX? Find out in our full research report (it’s free).

FedEx (FDX) Q3 CY2025 Highlights:

  • Revenue: $22.24 billion vs analyst estimates of $21.66 billion (3.1% year-on-year growth, 2.7% beat)
  • Adjusted EPS: $3.83 vs analyst estimates of $3.62 (5.7% beat)
  • Adjusted EBITDA: $2.39 billion vs analyst estimates of $2.31 billion (10.7% margin, 3.3% beat)
  • Adjusted EPS guidance for the full year is $18.10 at the midpoint, missing analyst estimates by 1.1%
  • Operating Margin: 5.3%, in line with the same quarter last year
  • Market Capitalization: $55.15 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From FedEx’s Q3 Earnings Call

  • Jordan Alliger (Goldman Sachs) sought clarity on the factors influencing the EPS guidance range. CFO John Dietrich explained it depends on evolving trade, industrial, and demand conditions, not just revenue variability.
  • Ken Hoexter (Bank of America) asked about the sources of cost headwinds. Dietrich detailed that the $1 billion impact stems from the removal of de minimis, direct trade-related expenses, and incremental compliance costs.
  • Bascome Majors (Susquehanna) questioned strategy on data monetization. CEO Rajesh Subramaniam emphasized FedEx’s unique operational data and ambitions to leverage AI for new revenue streams, stating, “FedEx owns one of the richest logistics, intelligent assets in the world.”
  • Scott Group (Wolfe Research) pressed on why operating leverage was muted despite revenue growth. Dietrich cited mix shift to less profitable traffic and persistent trade headwinds as the primary reasons.
  • Richa Harnain (Deutsche Bank) inquired about the sustainability of share gains in SMB and health care. Chief Customer Officer Brie Carere attributed momentum to direct selling, a robust loyalty program, and differentiation in rural and weekend coverage.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and profitability of new customer onboarding, including Amazon and additional health care clients, (2) the company’s ability to offset trade policy-related headwinds through pricing and efficiency gains, and (3) progress on Network 2.0 integration and transformation savings. Developments in the spin-off of FedEx Freight and uptake of AI-driven digital tools will also be key factors to track.

FedEx currently trades at $234, up from $226.85 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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