FedEx shares pop on hefty profit beat, UPS customer wins
By Lisa Baertlein and Priyamvada C
(Reuters) -FedEx raised the lower end of its full-year profit forecast on Wednesday after a cost-cutting quarter when it poached customers from rivals UPS and Yellow (OTC:YELLQ).
FedEx (NYSE:FDX) shares jumped 5.7% to $264.60 in extended trading after the Memphis-based company said it now expects adjusted fiscal 2024 earnings of $17 to $18.50 per share, increasing the low end of the range by 50 cents from its prior forecast.
The global delivery firm reported fiscal first-quarter adjusted earnings of $4.55 per share, blowing past Wall Street expectations of $3.73 per share, according to LSEG data.
Tumultuous labor talks at direct competitor United Parcel Service (NYSE:UPS) and the bankruptcy of trucking firm Yellow created market share opportunities in the U.S. transportation industry, FedEx CEO Raj Subramaniam said on a conference call to discuss the results.
«We captured upside as a result of these one-time events,» he said.
Operating income in FedEx's Ground division jumped 59% for the quarter ended Aug. 31. That unit benefited from UPS customers shifting packages to alternate carriers ahead of the Aug. 1 expiration of its contract covering about 340,000 United Brotherhood of Teamsters-represented workers.
UPS executives last month said its customers shifted 1 million packages per day to other providers, resulting in about $200 million of lost sales. FedEx said it added about 400,000 to its average daily volume by the end of August.
Memphis, Tennessee-based FedEx also took advantage of the demise of Yellow, a dominant player in the less-than-truckload trucking sector in which FedEx Freight is a major player. FedEx said it added about 5,000 average daily shipments after the
Read more on investing.com
