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) $ 82,573.12 2.03%
ethereum
Ethereum (ETH) $ 1,877.55 2.80%
tether
Tether (USDT) $ 1.00 0.01%
xrp
XRP (XRP) $ 2.31 5.10%
bnb
BNB (BNB) $ 596.35 0.26%
solana
Solana (SOL) $ 130.05 2.79%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.708445 5.20%
dogecoin
Dogecoin (DOGE) $ 0.168253 3.80%
tron
TRON (TRX) $ 0.213519 4.77%
staked-ether
Lido Staked Ether (STETH) $ 1,875.94 2.84%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 82,369.07 1.91%
pi-network
Pi Network (PI) $ 1.46 0.68%
leo-token
LEO Token (LEO) $ 9.61 0.61%
chainlink
Chainlink (LINK) $ 13.56 3.51%
the-open-network
Toncoin (TON) $ 3.38 14.87%
usds
USDS (USDS) $ 1.00 0.02%
stellar
Stellar (XLM) $ 0.265124 3.69%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,241.39 2.96%
hedera-hashgraph
Hedera (HBAR) $ 0.186636 4.04%
avalanche-2
Avalanche (AVAX) $ 18.52 0.27%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 0.41%
sui
Sui (SUI) $ 2.23 4.25%
litecoin
Litecoin (LTC) $ 89.15 5.13%
bitcoin-cash
Bitcoin Cash (BCH) $ 326.33 4.84%
mantra-dao
MANTRA (OM) $ 6.56 1.04%
polkadot
Polkadot (DOT) $ 4.22 3.07%
ethena-usde
Ethena USDe (USDE) $ 0.99996 0.01%
weth
WETH (WETH) $ 1,875.60 2.90%
bitget-token
Bitget Token (BGB) $ 4.37 1.27%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.06%
hyperliquid
Hyperliquid (HYPE) $ 13.45 6.55%
whitebit
WhiteBIT Coin (WBT) $ 28.69 0.69%
wrapped-eeth
Wrapped eETH (WEETH) $ 1,989.45 3.00%
monero
Monero (XMR) $ 209.84 0.16%
uniswap
Uniswap (UNI) $ 6.04 1.56%
susds
sUSDS (SUSDS) $ 1.04 0.02%
dai
Dai (DAI) $ 0.999904 0.00%
aptos
Aptos (APT) $ 5.19 2.23%
near
NEAR Protocol (NEAR) $ 2.54 3.62%
pepe
Pepe (PEPE) $ 0.000007 4.77%
okb
OKB (OKB) $ 45.35 1.58%
internet-computer
Internet Computer (ICP) $ 5.62 1.92%
mantle
Mantle (MNT) $ 0.805077 8.04%
ondo-finance
Ondo (ONDO) $ 0.83201 5.27%
ethereum-classic
Ethereum Classic (ETC) $ 17.34 3.46%
gatechain-token
Gate (GT) $ 20.97 1.34%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 82,588.13 1.97%
aave
Aave (AAVE) $ 165.51 5.41%
tokenize-xchange
Tokenize Xchange (TKX) $ 29.94 3.54%