FedEx (FDX) -) shares powered higher in pre-market trading after the package delivery giant posted stronger-than-expected first quarter earnings, and boosted its full-year profit forecast.
FedEx said adjusted earnings for the three months ending in August, the group's fiscal fourth quarter, came in at $4.55 per share, a 32.3% leap from the same period last year that was well ahead of the Street consensus forecast of $3.74 per share.
Group revenues, FedEx said, fell 6.6% from last year to $21.7 billion, missing analysts' estimates of a $28.81 billion tally, but the group did say it was able to win back market share from its larger rival, United Parcel Service, amid that group's months-long labor dispute, as well as the Chapter 11 bankruptcy filing of truck group Yellow.
Looking into the group's current fiscal year, FedEx said it sees revenue growth that is flat to last 2023 levels, a modestly weaker forecast than it had previously issued, with earnings in the region of $17.00 to $18.50 per share, a solid bump from its prior forecast of between $16.50 to $18.50 "after also excluding costs related to business optimization initiatives."
"During the quarter, labor negotiations at our primary competitor and the bankruptcy of Yellow disrupted the market," said CEO Raj Subramaniam told investors on a conference call late Wednesday. "Our priorities were clear: protect our customers, deliver outstanding service, and focus on high-quality revenue."
"We delivered on those priorities, leveraging our flexible network to profitably add volume while maintaining the highest levels of service," he added. "While the captured upside as a result of these one-time events, we were highly discerning in terms of the business we accepted in keeping with our goal to drive high-quality revenue. Importantly, we expect to maintain the majority of the volume we added in the quarter."
FedEx share were marked 3.6% higher in mid-day Thursday trading to change hands at $259.44 each, a move that would extend the stock's year-to-date gain to around 53%.
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