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FedEx stock surges as profit forecast tops analyst expectations

Published 2024/06/25, 22:12
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FedEx Corp (NYSE:FDX) shares soared by more than 8% in afterhours trading after the company reported fourth-quarter earnings that surpassed Wall Street expectations and provided a strong earnings forecast for fiscal 2025.

The logistics giant posted adjusted earnings per share (EPS) of $5.41, edging out the analyst consensus of $5.34. Revenue for the quarter stood at $22.1 billion, slightly above the consensus estimate of $22.05 billion and up from $21.9 billion in the same quarter last year.

The robust performance and positive market reaction can be attributed to the company's strategic initiatives, which have led to a modest increase in revenue and improvements in operating income and margin, the company said.

FedEx's DRIVE program, aimed at reducing structural costs, has been a significant factor in the company's financial success this quarter.

According to FedEx Corp. president and CEO Raj Subramaniam, the company delivered four consecutive quarters of expanding operating income and margin, a notable achievement in a challenging revenue environment.

Looking ahead, FedEx forecasts an EPS range of $20.00 to $22.00 for fiscal 2025, which is above the midpoint compared to the analyst consensus of $20.85.

The company anticipates a low-to-mid single-digit percent revenue growth year over year and expects to achieve $2.2 billion in permanent cost reductions through its DRIVE program.

Subramaniam expressed confidence in the company's direction, stating, "We expect this momentum to continue in fiscal 2025 as we advance our efforts to create the world’s most flexible, efficient, and intelligent network."

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