Fedex On Thursday, it raised its full-year earnings forecast as it said cost-cutting measures are offsetting continued weak demand in units such as FedEx Express.
FedEx now expects adjusted earnings per share for fiscal year 2023 to be between $14.60 and $15.20, up from a previous forecast of between $13.00 and $14.00. Wall Street expected annual EPS of $13.56, according to Refinitiv.
Shares of the company jumped 8% in after-hours trading.
Here’s how FedEx fared in its third fiscal quarter of 2023compared to Refinitiv consensus estimates:
- Earnings per share: $3.41 adjusted vs $2.73 expected
- Income: $22.17 billion vs $22.74 billion expected
FedEx reported net income of $771 million for the period, compared with $1.11 billion in the same quarter a year earlier. Adjusting for one-time items, FedEx reported earnings per share of $3.41, which beat estimates but marks a dramatic year-over-year decline from the $4.59 per share it declared for the same period last year.
The company said Thursday it expects to achieve more than $4 billion in cost reductions by the end of fiscal 2025.
“We have continued to act urgently to improve efficiency, and our cost reduction measures are needed, leading to an improved outlook for the current fiscal year,” CEO Raj Subramaniam said in a statement on the results. results.
Last month, Memphis-based FedEx announced it would lay off 10% of its executives and directors as part of its sweeping cost-cutting plan as consumer demand cools. Its plans also include reducing flights and grounding aircraft, reducing office space and adjustments to the ground unit during collection and delivery, Chief Financial Officer Mike Lenz said during the the company’s second quarter earnings call.
FedEx raised shipping rates an average of 6.9% in January to compensate, and on Thursday reported an 11% increase in revenue per shipment in its fiscal third quarter.
FedEx should inform investors during a 5 avril event.
The company could also comment on tense contract negotiations with its FedEx pilots union. The pilots unanimously approved allowing the union to authorize a strike, although strikes involve a long and complicated process in the industry.
This is a developing story. Check back for updates.
