FedEx hikes 2023 earnings forecast as cost-cutting initiatives bear fruit

FedEx hikes 2023 earnings forecast as cost-cutting initiatives bear fruit


In this photo FedEx logo is seen in Washington D.C., United States on February 16, 2023.

Celal Gunes | Anadolu Agency | Getty Images

FedEx on Thursday hiked its full-year earnings forecast as it said cost-cutting measures offset continued demand weakness at units including FedEx Express.

FedEx now expects adjusted earnings per share for fiscal year 2023 of between $14.60 and $15.20, up from a prior forecast of between $13.00 and $14.00. Wall Street had expectated full-year EPS of $13.56, according to Refinitiv consensus estimates.

The company’s stock popped 8% in after-hours trading.

Here’s how FedEx performed in its fiscal third quarter of 2023, compared with Refinitiv:

  • Earnings per share: $3.41 adjusted vs. $2.73 expected
  • Revenue: $22.17 billion vs. $22.74 billion expected

Revenue of about $22.2 billion marked a slight year over year decrease from $23.6 billion during the fiscal third quarter of 2022.

FedEx reported net income of $771 million for the period, down from $1.11 billion during the same quarter a year earlier. Adjusting for one-time items, FedEx posted per-share earnings of $3.41, which beat estimates but marked a dramatic year over year decline from the $4.59 per share it reported for the same period last year.

The company reiterated Thursday it is expecting to make more than $4 billion in cost reductions by the end of fiscal year 2025.

“We’ve continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year,” CEO Raj Subramaniam said in an earnings release.

Last month, Memphis-based FedEx said it would lay off 10% of its officers and directors as part of its wide-sweeping plan reduce costs while consumer demand cools. Its plans also include cutting flights and grounding planes, reducing office space and making adjustments to the Ground unit in pick-up and delivery, CFO Mike Lenz said on the company’s second-quarter earnings call.

FedEx raised its shipping rates by an average of 6.9% in January to offset and on Thursday reported an 11% increase in revenue per shipment during its fiscal third quarter.

FedEx is expected to update investors at an April 5 event. The company could also comment on tense contract negotiations with its FedEx pilots’ union. Pilots unanimously approved allowing the union to authorize a strike, though strikes include a lengthy and complicated process in the industry.

This is a developing story. Check back for updates.



Source

Disney layoffs will begin this week, CEO Bob Iger says in memo
Business

Disney layoffs will begin this week, CEO Bob Iger says in memo

Bob Iger, CEO, Disney, during CNBC interview, Feb. 9, 2023. Randy Shropshire | CNBC Disney will begin layoffs this week, the first of three rounds before the beginning of the summer that result in about 7,000 job cuts, according to a memo sent by Chief Executive Bob Iger. The cuts are part of a broader […]

Read More
Chipotle to pay ex-employees 0,000 after closing Maine location that tried to unionize
Business

Chipotle to pay ex-employees $240,000 after closing Maine location that tried to unionize

Chipotle restaurant in Teterboro, New Jersey. SOPA Images | LightRocket | Getty Images Chipotle Mexican Grill has agreed to pay $240,000 to the former employees of an Augusta, Maine, location as part of a settlement for closing the restaurant when workers tried to unionize. Employees at the Chipotle restaurant filed a petition to unionize under […]

Read More
Shrinking food stamp benefits for families mean yet another challenge for retailers
Business

Shrinking food stamp benefits for families mean yet another challenge for retailers

A worker carries bananas inside the Walmart SuperCenter in North Bergen, New Jersey. Eduardo Munoz Alvarez | AP For some shoppers who already struggle to cover grocery bills, the budget is getting tighter. This month, pandemic-related emergency funding from the Supplemental Nutrition Assistance Program, formerly known as food stamps, is ending in most states, leaving […]

Read More