FedEx’s aggressive cost-cutting measures, including parking planes, closing facilities and merging some of its units, helped to protect profits.

It has a US$1 billion cost-saving plan for this fiscal year ending in May 2026.

Its performance was also driven by a 5% jump in domestic average daily volumes, while its operating margin, a closely watched metric, increased to 6% from 5.2%, which signaled that US consumer demand was resilient.

“FedEx’s solid first quarter and issuance of a FY2026 guide was a positive surprise for a company that has been battered by a wide array of headwinds,” said JP Morgan analysts.

Shares of rival United Parcel Service (UPS) were up more than 1%.

FedEx reported a rise in adjusted profit per share to US$3.83 from US$3.60 a year earlier, surprising Wall Street analysts, who expected a fall in earnings due to the end of “de minimis” exemptions, which allowed shipments valued under US$800 to enter the US duty-free.

The company said global tariffs, including the end of the de minimis exemption for China and Hong Kong, cut first-quarter revenue by US$150 million, a hit expected to recur each quarter this year.

Combined with other pressures, trade policies represent a US$1 billion headwind for FY26, chief customer officer Brie Carere said.

While international export volumes fell 3%, overall average daily volume rose 4% and revenue per package increased 2%.

FedEx trades at 11.83 times its projected 12-month forward earnings, compared with UPS’s 12.04.

However, both companies’ stocks are trailing the broader market this year amid softening industrial demand and customers favouring cheaper ground shipping.