“We're improving our cost structure to enable us to profitably grow with e-commerce and are well-positioned to see significant incremental margins on our priority services once global industrial production improves.”

In context

“Service contract expiration. We remain confident in our ability to offset these headwinds with the $2.2 billion from incremental DRIVE savings. Further supporting this revised outlook is our continued commitment to revenue quality as evidenced by our calendar year '25 general rate increase, peak surcharges, and fuel table price changes announced in recent months. For the full year, we continue to expect year over year adjusted operating margin expansion at Federal Express and operating margin contraction at FedEx Freight, given the challenging industrial production environment. At the midpoint of our revised FY '25 outlook, we're assuming 9.6% adjusted EPS growth on approximately flat revenue. This expectation further highlights how DRIVE is fundamentally changing the way we do business. We're improving our cost structure to enable us to profitably grow with e-commerce and are well-positioned to see significant incremental margins on our priority services once global industrial production improves. It remains my highest priority to ensure that we continue to unlock the value that I know exists in our business. Moving to capital allocation. We remain committed to reducing our capital intensity while increasing our capital returns. In Q2, capital expenditures were approximately $820 million. Our planned FY '25 CapEx remains $5.2 billion, which is flat on a year-over-year basis, and this will translate into continued strong levels of adjusted free cash flow. We completed an additional $1 billion in share repurchases in Q2, bringing the year-to-date total to $2 billion, with an additional $500 million of repurchases planned for the fiscal second half. I remain confident in our near- and long-term ability to grow earnings while continuing to deliver strong levels of adjusted free cash fl”