FedEx eyes fiscal 2025 profit just above Wall St target, shares soar
FedEx on Tuesday forecast fiscal 2025 profit above analysts' estimates, and shares in the delivery giant soared as executives said slashing expenses and consolidating operations would bolster returns even as demand remained weak for package deliveries.
Shares of FedEx jumped 14 in extended trading as the Memphis-based company targeted fiscal 2025 earnings of $20 to $22 per share — the midpoint of which was slightly above analysts' estimate of $20.92. The company is also weighing whether to will keep or sell its freight trucking business that generated revenue of $2.3 billion in the latest quarter.
The news helped investors shake off worries that the trends that drove a 10% gain in FedEx shares over the last year were diminishing.
FedEx earnings excluding items grew 7.2% to $1.34 billion, or $5.41 per share, for the fourth quarter that ended on May 31. Operating margin also improved to 8.5% from 8.1% in the year-ago quarter.
«These results are unprecedented in this current environment,» FedEx CEO Raj Subramaniam said. «We expect this momentum to continue in fiscal 2025.»
The company's largest unit, Express overnight delivery, has struggled with falling volumes as the U.S. Postal Service shifts packages from higher-margin air services to more economical ground services. FedEx's unprofitable U.S. Postal Service contract, which accounted for about $1.75 billion in revenue to FedEx during the postal service's latest fiscal year, will end on Sept. 29.
Express operating margin, excluding items, fell to 4.1% during
