FedEx reported a higher quarterly profit but forecast 2026 earnings per share largely below analysts' estimates, as it anticipates a hit from the U.S. decision to end tariff exemptions on low value direct-to-consumer shipments.

Shares of the company were up about 6% in extended trading Thursday.

The U.S. administration on May 2 ended the century-old "de minimis" exemptions, which allowed shipments valued under $800 to enter duty free, for packages from China and Hong Kong.

Those shipments accounted for about three-quarters of roughly 1.4 billion packages that entered the United States each year under the program.

The U.S. extended the removal of "de minimis" exemptions to all countries on August 29. The impact from this is expected to show up in FedEx's results over the coming quarters.

The Memphis-based package delivery company said it expects full-year adjusted earnings in the range of $17.20 to $19.00 per share, mid-point of which is marginally below analysts' estimates of $18.21, according to data compiled by LSEG.

FedEx reported an adjusted profit of $0.91 billion, or $3.83 per share, for the first quarter ended August 31, up from $0.89 billion, or $3.60 per share a year earlier.

The company since 2023 has worked to slash billions of dollars in operating costs by parking planes, closing facilities and merging units. It has a $1 billion cost-savings plan for fiscal year ended May 2026.

It reported first-quarter revenue of $22.2 billion, up from $21.6 billion, a year earlier.