04:43 PM EDT, 03/19/2026 (MT Newswires) -- FedEx ( FDX ) late Thursday reported a surprise increase in fiscal third-quarter earnings as gains in domestic package volume helped lift revenue above Wall Street's estimates.

Adjusted per-share earnings increased to $5.25 in the three months ended Feb. 28 from $4.51 a year earlier. The FactSet-polled consensus was for a drop to $4.15. Revenue climbed to $24 billion from $22.2 billion, compared with the Street's $23.49 billion view.

Shares were up 5.3% in after-hours trading, and have gained 23% this year through Thursday close.

Consolidated operating income improved amid higher US domestic package volume and continued cost cuts, FedEx ( FDX ) said.

Operating results at Federal Express rose as US domestic and international priority package yields rose. The freight segment's results decreased due to lower shipments, higher wage rates, and increased costs related to the division's planned separation.

The freight spinoff is expected to complete on June 1, FedEx ( FDX ) said.

Morgan Stanley expected the third quarter to come in "modestly ahead of consensus," driven by strength in the Express division.

Freight, however, was seen facing industrial softness, weather-related disruptions, and limited operating leverage, Morgan Stanley said in a note earlier this month.

FedEx ( FDX ) now expects fiscal 2026 adjusted EPS at $19.30 to $20.10, excluding business optimization costs, retirement plan adjustments, and the planned spinoff of its freight division. The company previously forecast $17.80 to $19. Analysts polled by FactSet project normalized EPS of $18.69.

Revenue growth is pegged at 6% to 6.5% year-over-year, higher than the prior estimate that called for an increase of 5% to 6%.

FedEx ( FDX ) in February introduced 2029 targets, including a 4% compound annual growth rate for revenue, based on the mid-point of the 2026 outlook provided in December.