2024

Wednesday

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<p class="has-drop-cap">FedEx Corporation (NYSE: FDX) shares soared in <a href="https://tokenist.com/investing/how-to-trade-after-hours/" rel="noopener noreferrer nofollow" class="deco-link">pre-market trading</a> Wednesday following the release of its <a href="https://investors.fedex.com/news-and-events/investor-news/investor-news-details/2024/FedEx-Reports-Higher-Full-Year-Diluted-EPS-of-17.21-and-Adjusted-Diluted-EPS-of-17.80/default.aspx" target="_blank" aria-label="fourth-quarter and full-year fiscal 2024 results (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">fourth-quarter and full-year fiscal 2024 results</a>.</p>
<p>The shipping giant reported better-than-expected earnings, driven by aggressive cost-cutting measures and improved operational efficiency. As of 6:26 AM EDT, FedEx stock was up 14.05% to $292.40, marking a significant jump from its previous close of $256.38.</p>
<h3 id="fedex-s-fourth-quarter-and-full-year-performance">FedEx’s Fourth Quarter and Full-Year Performance</h3>
<p>FedEx reported a modest increase in fourth-quarter revenue, rising to $22.1 billion from $21.9 billion a year earlier. Operating income for the quarter climbed to $1.56 billion, up from $1.50 billion in the same period last year. The company’s adjusted operating margin improved to 8.5%, compared to 8.1% in the previous year’s quarter.</p>
<p>For the full fiscal year 2024, FedEx saw a slight decline in revenue to $87.7 billion, down from $90.2 billion in fiscal 2023. However, the company’s cost-cutting initiatives paid off, with full-year operating income increasing to $5.56 billion from $4.91 billion the previous year.</p>
<p>The adjusted operating margin for the year improved to 7.1%, up from 6.0% in fiscal 2023. Full-year diluted earnings per share (<a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">EPS</a>) rose to $17.21, with adjusted EPS reaching $17.80, both showing significant improvements over the previous year’s figures.</p>
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<h3 id="fedex-s-cost-cutting-measures-drive-profitability-in-q4">FedEx’s Cost-Cutting Measures Drive Profitability in Q4</h3>
<p>FedEx’s impressive results can be largely attributed to its <a href="https://www.reuters.com/markets/us/fedex-outline-plans-fiscal-2024-2025-cost-reductions-2023-04-05/" target="_blank" aria-label="aggressive cost-cutting strategy (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">aggressive cost-cutting strategy</a>. The company’s DRIVE program, aimed at reducing costs by $4 billion by the end of fiscal 2025, has already yielded $1.8 billion in structural cost reductions in fiscal 2024.</p>
<p>The shipping giant is consolidating its air and ground services into a unified FedEx Corporation, expecting an additional $2 billion in savings from this consolidation.</p>
<p>Other cost-saving measures include the permanent retirement of 22 Boeing 757-200 aircraft and seven related engines, as well as plans to close seven FedEx Freight facilities to optimize operations. Capital spending was reduced to $5.2 billion in fiscal 2024, down 16% from the previous year.</p>
<p>Looking ahead, FedEx forecasts $2.2 billion in cost savings from the DRIVE program in fiscal 2025, as it continues to focus on reducing structural costs and lowering the capital intensity of its business.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/fedex-stock-surges-after-q4-results-cost-cutting-boosts-profit/">FedEx Stock Surges After Q4 Results, Cost Cutting Boosts Profit</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

FedEx Stock Surges After Q4 Results, Cost Cutting Boosts Profit

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