When FedEx Corp. reports earnings after the market closes on Thursday, much of the focus will likely be on the poor results at the Express unit, the company’s largest by sales. That business, whose airline and international operations are run by Richard Smith, the son of founder Fred Smith, suffered through weather disruptions at its main Memphis air hub for nine consecutive days in January and another winter storm earlier this month.

These weather setbacks only muddle the picture for the turnaround effort at Express, which accounted for 47% of the company’s sales last year. Revenue at Express is expected to fall about 2% from a year earlier, and operating profit margins are forecast to be around 1%. There’s a chance the unit could post a loss. Investors will be keen to hear about the progress of Chief Executive Officer Raj Subramaniam’s cost-cutting plan and the rebound of air cargo, which jumped 18% in January from a year earlier, according to data from the International Air Transportation Association.

Perhaps even more important than the turbulence at Express is the health of the company’s Ground unit, FedEx’s most profitable business. In fact, Ground posted operating profit of $3.1 billion in fiscal year 2023, three times as much as the larger Express unit. The concern is that the era of large price increases at Ground is over as package demand stalls, and there’s a danger that revenue per package may begin to slip. That would be a bad sign for both FedEx and its main rival, United Parcel Service Inc.

Since the pandemic hit in 2020, FedEx’s revenue per package soared 33% as retailers leaned on e-commerce to keep their businesses afloat. FedEx and UPS not only commanded higher prices, they even limited volume from some large shippers during the peak season at the height of the pandemic because their networks were full. The bargaining-power pendulum has now swung back in favor of shippers. The tailwind of higher prices could now