06:36 AM EDT, 06/25/2025 (MT Newswires) -- FedEx ( FDX ) shares fell early Wednesday after the parcel delivery giant provided a fiscal first-quarter earnings outlook below market estimates and declined to give a full-year view amid tariff uncertainty, even though its results topped expectations in the previous three-month period.

Per-share adjusted earnings, excluding costs related to the company's optimization efforts and the planned separation of its freight division, are anticipated to come in between $3.40 and $4 for the ongoing quarter, it said late Tuesday. The midpoint of $3.70 is below the current consensus on FactSet for $3.86, according to MT Newswires' calculations.

The company expects a $170 million headwind to adjusted operating income in the quarter from international exports because of the impact of global trade policy, Chief Financial Officer John Dietrich said during an earnings call. FedEx ( FDX ) also forecasts the expiration of the US postal service contract to generate a negative impact of $120 million, Dietrich said on the call, according to a FactSet transcript.

Revenue is pegged to be flat to up 2% for the current three-month period, while the Street is looking for $21.78 billion. "The lower end of our range assumes incremental pressure to US domestic demand," Chief Customer Officer Brie Carere said on the call. "Internationally, we expect revenue from the China to US lane to remain pressured consistent with what we saw exiting (the fourth quarter)."

Shares of FedEx ( FDX ) declined 5.6% in the most recent premarket activity. The company will resume giving full-year guidance "once more clarity is gained" around global trade policy and demand, it said in a presentation.

For the quarter ended May 31, adjusted EPS rose to $6.07 from $5.41 the year before, ahead of the average analyst estimate of $5.82. Revenue ticked up to $22.22 billion from $22.11 billion, above the Street's view for $21.74 billion.

"In early May, upon tariff implementation, China to US volumes deteriorated sharply and remained weak throughout the rest of the quarter," Carere said. "Our international export revenue was flat, reflecting the tariff-related impact on our transpacific trade lane."

After announcing sweeping reciprocal tariffs early in April, US President Donald Trump announced a 90-day pause on certain levies for non-retaliating countries. Earlier in June, the US and China agreed on a framework for implementing a pact that the two countries reached in Switzerland last month.

Revenue in the express segment moved 1% higher to $18.98 billion, amid increased demand for domestic and international economy services, according to an earnings presentation. The freight division saw revenue decline by 4% to $2.3 billion, driven by lower fuel surcharges and fewer shipments.

In December, FedEx ( FDX ) announced plans to spin off its freight operations into a separate publicly listed company. "As we prepare for the Freight spinoff, we are continuing to execute on our commercial strategy with an emphasis on improved service and pricing discipline, and we continue to build out our dedicated sales force," Carere said on the call.

For fiscal 2026, the company wants permanent cost reductions of $1 billion from restructuring programs. FedEx ( FDX ) said it reached its expense reduction target of $2.2 billion in the previous fiscal year and delivered $4 billion in total DRIVE program structural cost reductions versus fiscal 2023.

FedEx ( FDX ) aims to spend $4.5 billion in capital in the ongoing fiscal year, focusing on its network and improving efficiency, including modernization and automation.