(Reuters) -FedEx reported a higher quarterly profit but forecast 2026 earnings per share that was 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.

The Memphis-based package delivery company said on Thursday 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 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.

Investors and analysts are watching to see if that will be enough to offset threats posed by U.S. trade policy and global economic uncertainties.

The company 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.

(Reporting by Lisa Baertlein in Los Angeles and Abhinav Parmar in Bengaluru; Editing by Shinjini Ganguli)