FedEx Corporation (NYSE: FDX) unveiled its fiscal first-quarter results on Wednesday, revealing a mixed performance as revenue fell slightly short of Wall Street expectations. The global shipping giant also provided a guidance update that painted a mixed picture, raising its annual earnings projection but revising down its revenue forecasts.
As a result of these developments, FedEx’s stock soared by 5% in the wake of the report.
For the first quarter of the fiscal year, FedEx reported an adjusted earnings per share (EPS) of $4.55 on a total revenue of $21.7 billion. These figures surpassed the consensus estimates of analysts polled by Investing.com, who had anticipated an EPS of $3.70 on revenue amounting to $21.73 billion.
The impressive performance on the bottom line was primarily driven by the company’s successful cost-cutting measures, which had a positive impact on its operating results. However, this achievement was somewhat offset by ongoing weaknesses in demand, as noted by the company.
Looking ahead to fiscal 2024, FedEx presented a nuanced outlook. While the company upgraded its earnings forecast, it concurrently downgraded its revenue expectations, citing persistent challenges in demand.
FedEx now anticipates EPS to fall within the range of $17 to $18.50, a notable increase from the prior forecast of $16.50 to $18.50. However, revenue growth is expected to remain flat year over year, in contrast to the earlier projection of flat to low-single-digit-percent growth.
Furthermore, as part of its strategic financial plan, FedEx announced its intention to repurchase an additional $1.5 billion worth of stock during fiscal 2024.
The market’s positive response to the earnings report underscores investor confidence in FedEx’s ability to navigate challenges in the ever-evolving shipping industry while capitalizing on opportunities for profit growth.
