Stock Market News

FedEx shares pop on hefty profit beat, UPS customer wins

2023.09.20 18:25


© Reuters. FILE PHOTO: A Federal Express truck is shown in Los Angeles, California, U.S., October 16, 2019. REUTERS/Mike Blake/File Photo

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:).

FedEx (NYSE:) 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:) 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 bankruptcy. Nevertheless, the Freight unit’s operating income fell 26% during the quarter.

Operating income in its largest Express division rose 18% for the quarter, as cost cuts from parking aircraft and layoffs more than offset a 9% revenue decline due to soft global demand.

FedEx and other shipping companies are grappling with a global downturn and racing to adjust costs to match diminished demand. As a result, the company now expects full-year revenue to be flat versus a year ago, compared with its prior projection of flat to low-single-digit percent revenue growth.

Under pressure from investors including activist D.E. Shaw, FedEx last year slashed its workforce, retired and parked planes, shuttered offices and pared back profit-sapping Sunday deliveries in a bid to cut $4 billion in permanent costs by the end of its 2025 financial year. It also began merging its separately operated divisions to better compete with more cost-conscious UPS.

In a nod to shareholders, FedEx said it would repurchase $1.5 billion of common stock this fiscal year ended May

(Reporting Lisa Baertlein by in Los Angeles; Additional reporting by Priyamvada C in Bengaluru; Editing by Bill Berkrot)

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 83,290.32 0.87%
ethereum
Ethereum (ETH) $ 1,895.32 1.76%
tether
Tether (USDT) $ 1.00 0.00%
xrp
XRP (XRP) $ 2.34 2.74%
bnb
BNB (BNB) $ 597.84 0.09%
solana
Solana (SOL) $ 132.29 0.48%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.719877 2.80%
dogecoin
Dogecoin (DOGE) $ 0.170385 2.25%
tron
TRON (TRX) $ 0.215352 3.54%
staked-ether
Lido Staked Ether (STETH) $ 1,894.09 1.72%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 83,321.32 0.58%
pi-network
Pi Network (PI) $ 1.46 0.17%
leo-token
LEO Token (LEO) $ 9.71 1.71%
chainlink
Chainlink (LINK) $ 13.78 1.18%
the-open-network
Toncoin (TON) $ 3.40 15.79%
usds
USDS (USDS) $ 1.00 0.00%
stellar
Stellar (XLM) $ 0.268604 1.74%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,277.85 1.25%
hedera-hashgraph
Hedera (HBAR) $ 0.189141 2.10%
avalanche-2
Avalanche (AVAX) $ 18.71 1.14%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 0.48%
sui
Sui (SUI) $ 2.28 1.55%
litecoin
Litecoin (LTC) $ 90.19 3.36%
bitcoin-cash
Bitcoin Cash (BCH) $ 329.89 4.08%
mantra-dao
MANTRA (OM) $ 6.58 0.94%
polkadot
Polkadot (DOT) $ 4.24 2.07%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.07%
weth
WETH (WETH) $ 1,893.35 1.78%
bitget-token
Bitget Token (BGB) $ 4.37 1.17%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.05%
hyperliquid
Hyperliquid (HYPE) $ 13.43 5.97%
whitebit
WhiteBIT Coin (WBT) $ 28.79 1.24%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,012.69 1.77%
monero
Monero (XMR) $ 211.46 0.62%
uniswap
Uniswap (UNI) $ 6.12 0.32%
susds
sUSDS (SUSDS) $ 1.04 0.01%
dai
Dai (DAI) $ 1.00 0.03%
aptos
Aptos (APT) $ 5.24 1.42%
near
NEAR Protocol (NEAR) $ 2.59 1.02%
pepe
Pepe (PEPE) $ 0.000007 2.50%
okb
OKB (OKB) $ 45.97 0.30%
internet-computer
Internet Computer (ICP) $ 5.68 0.19%
mantle
Mantle (MNT) $ 0.80143 7.64%
ondo-finance
Ondo (ONDO) $ 0.843897 2.73%
ethereum-classic
Ethereum Classic (ETC) $ 17.55 2.31%
gatechain-token
Gate (GT) $ 21.43 0.73%
aave
Aave (AAVE) $ 169.08 2.87%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 83,408.35 0.61%
tokenize-xchange
Tokenize Xchange (TKX) $ 29.84 3.51%