FedEx Freight Holding Company, Inc. (FDXF)

FedEx Freight reported revenue of $3.3 billion for the four-month transition period ended September 30, 2026, up 9.2 percent from a year earlier 2.

Operating income was $383 million, down 6.1 percent, which the quarterly report ties mainly to higher separation costs after the spin-off from FedEx Corporation 21.

Revenue rose mainly on higher fuel surcharges and better base yield, partly offset by lower shipment volume, and average daily shipments fell 1.4 percent to 88.9 thousand 12.

The company also introduced guidance for the three months ending December 31, 2026, with revenue of $2.30 billion to $2.37 billion 2.

Still open is what follows the spin-off: FedEx Corporation kept 19.9 percent of the shares and is to dispose of them within 24 months 7.

The company said it is on track to announce a dividend and share repurchase plan for calendar year 2027, subject to board approval 2.

FedEx Freight was assembled by acquisition inside FedEx Corporation 3.

FedEx acquired Viking Freight in January 1998, American Freightways in February 2001 and Watkins Motor Lines in May 2006 3.

The pieces were then merged: in December 2008 the East and West businesses became FedEx Freight, Inc., and in January 2011 FedEx National LTL merged into it 3.

On June 1, 2024, FedEx Custom Critical, the expedited freight business, was transferred into FedEx Freight, Inc. 3.

On December 19, 2024, FedEx announced its plan to spin off FedEx Freight into an independent, publicly traded company 3.

FedEx Freight Holding Company was incorporated in Delaware on July 14, 2025, to receive all the equity of FedEx Freight, Inc. in a reorganization 1.

The spin-off closed on June 1, 2026, when FedEx distributed 80.1 percent of the shares, one for every two FedEx shares on record at the close of May 15, 2026 7.

Revenue had slipped from $9,424 million in the year ended May 31, 2024 to $8,892 million in 2025 and $8,795 million in 2026 3.

Operating income in the year ended May 31, 2026 fell to $540 million from $1,404 million, which the annual report ties to $492 million of spin-off costs and reduced demand 3.

Average daily shipments fell 4 percent to 86.1 thousand, which the report links to weak industrial production, trade policy uncertainty and excess capacity in the LTL industry 3.

Revenue per shipment still rose 4 percent to $386.63, mostly on higher fuel surcharges and heavier shipments 3.

Priority and Economy

FedEx Freight is the largest North American less-than-truckload carrier, which means it moves shipments too small to fill a trailer by combining freight from many customers 3.

Priority is the premium service, with next-business-day delivery for shipments up to 600 miles and second-business-day delivery up to 1,600 miles, backed by a money-back guarantee 3.

Economy is the value service for shipments with flexible transit needs, typically three to six days, and is generally not covered by a money-back guarantee 3.

Priority brought in $5,560 million in the year ended May 31, 2026, about 63 percent (computed) of revenue, and Economy $2,827 million, about 32 percent (computed) 3.

In the four months ended September 30, 2026, revenue per shipment was $393.06 for Priority, up 9 percent, and $458.98 for Economy, up 12 percent 1.

Economy average daily shipments fell 4 percent to 26,879 in the same period, while Priority stayed near 62,000 1.

Other services

Smaller offerings include Volume Services, which fills spare capacity with cost-sensitive freight, and FedEx Freight Direct for residential and commercial delivery with options such as inside delivery 3.

FedEx Custom Critical, a subsidiary, runs expedited freight, including Surface Expedite and White Glove Services, around the clock 3.

Network and people

As of June 1, 2026, the company operated over 365 locations, of which approximately 115 are owned and approximately 250 are leased, plus nearly 30,000 motorized vehicles 3.

It had approximately 40,000 employees and more than 26,000 service center doors, with headquarters in Memphis, Tennessee 3.

John Smith is president and chief executive officer, and Marshall Witt is chief financial officer 2.

On September 2, 2026, the company terminated Michael Lyons, an executive vice president, after an internal investigation found a Code of Conduct violation 5.

The company said his conduct did not affect financial reporting, controls, strategy or customer relationships, and that a search for a replacement is under way 5.

Customers and rivals

The company serves approximately 108,000 active customers; in 2026 its top five accounted for 9 percent of revenue and its largest for approximately 4 percent 3.

The annual report says the North American LTL market has approximately 10 scaled players, and rivals include national LTL carriers, truckload carriers, railroads and digital freight platforms 3.

Debt after the spin-off

Ahead of the spin-off the company took on $4.3 billion of debt, and $4.2 billion was outstanding at September 30, 2026 1.

Standard & Poor's rates its senior unsecured debt BBB- and Moody's Baa3 1.

The umbrella, in words

The company sells under the FedEx Freight name, a trademark owned by Federal Express Corporation, a FedEx subsidiary, and licensed to it under a Trademark License Agreement 3.

Exhibit 21 lists eight subsidiaries: FDXF Holding Corporation, FedEx Freight, Inc., American Freightways, Inc., FedEx Custom Critical, Inc., FedEx Freight Canada, Corp., and three Mexican companies 4.

The company reports approximately 355 shipping terminals, over 320 of them in the United States 3.

The largest owner on record is FedEx Corporation, which retained 19.9 percent of the shares after the spin-off 7.

For the transition period June 1 through December 31, 2026, the company now forecasts revenue of $5.58 billion to $5.65 billion 2.

It raised its adjusted operating income outlook to $695 million to $715 million from $605 million to $645 million 2.

Its operating income outlook moved to $465 million to $485 million from $475 million to $515 million 2.

For the three months ending December 31, 2026, the company guided to operating income of $80 million to $100 million and adjusted operating income of $185 million to $205 million 2.

The company expects capital spending of approximately $365 million for the seven months ending December 31, 2026, including technology needed to exit the Transition Services Agreement 1.

It expects to use FedEx services for a transitional period, generally not longer than 24 months after the spin-off 1.

The 10-Q expects softness in the industrial economy to keep pressure on demand for the rest of calendar year 2026 1.

The board set the first annual meeting of stockholders for May 5, 2027, with proposals for the proxy statement due by November 24, 2026 6.

The company said it is on track to announce its dividend and share repurchase plan for calendar year 2027, subject to board approval 2.