FedEx closed the door on the fiscal year late Tuesday with better-than-expected fourth-quarter earnings and revenue. The shipping heavyweight also gave initial fiscal 2025 guidance, as FedEx prepares for life without a contract with the United States Postal Service (USPS). FDX shares surged Wednesday.
FedEx reported fiscal fourth-quarter EPS growing 9.5% to $5.41 with revenue increasing 1% to $22.10 billion. Analysts predicted earnings of $5.34 per share and sales totaling $22.05 billion.
For the full fiscal year, FedEx saw EPS increase 19% to $17.80 on revenue of $87.7 billion, a 3% drop compared to a year ago. Analyst expectations had earnings of $17.77 per share on sales of $87.69 billion, according to FactSet.
In March, the shipping heavyweight predicted full-fiscal year earnings of $17.25-$18.25. At the end of the third quarter, FedEx said it expected revenue to be "pressured by volatile macroeconomic conditions negatively affecting customer demand for our services and constraining yield growth," for the remainder of the fiscal year.
"We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin in a challenging revenue environment," FedEx Chief Executive Raj Subramaniam said in the earnings release Tuesday.
"These results are unprecedented in this current environment," Subramanian added. "We expect this momentum to continue in fiscal 2025 as we advance our efforts to create the world's most flexible, efficient and intelligent network."
FedEx Fiscal 2o25 Outlook
Looking to fiscal 2025, FedEx predicts low-to-mid single-digit percent revenue growth. The company is also projecting adjusted earnings per diluted share of $20.00 to $22.00.
For fiscal 2025, FedEx said it expects to repurchase $2.5 billion of stock, including $1 billion during the first fiscal quarter.
FedEx added that its board of directors is conducting an assessment of the role of FedEx Freight and is looking into "potential steps to further unlock sustainable shareholder value." The shipping heavyweight is aiming to complete this review by the end of the calendar year, according to the earnings release.
FedEx announced in early April that it had not reached an agreement with USPS on a new contract and will go it alone when the current deal expires at the end of September. The contract brought FedEx around $2 billion annually for the past two-decades. The USPS has replaced FedEx with rival UPS .
Ahead of Tuesday's FedEx earnings release, analysts projected fiscal 2025 earnings of $20.92 per share and revenue totaling $90.47 billion.
FedEx Stock Performance
Shares of FedEx jumped 15.5% to 296.19 during market action on Wednesday, gapping above a 291.27 buy point from a base starting in late March. But FedEx has been consolidating since at least mid-December if not late July.
After earnings, Stifel raised its price target on FedEx stock to 327 from 303 and kept a buy rating on the shares. The firm wrote that the big news is that FedEx Freight is under review, which could result in a spinoff.
Meanwhile, UPS stock rose 2.8% Wednesday.
Over the weekend, UPS announced it is selling Coyote Logistics, the company's freight-brokerage business, for slightly more than $1 billion to RXO.
The transaction is expected to close by the end of 2024. UPS Chief Executive Carol Tome said in the news release Sunday that the sale to RXO "allows an even greater focus on our core business."
RXO stock surged more than 20% Monday.
The move by UPS comes as it has looked to reduce costs and streamline business in recent months. In late April, UPS reported a fifth straight quarterly earnings decline.
Both FedEx and UPS have lost ground to Amazon.com in parcel deliveries in recent years. In 2022, Amazon delivered more packages in the U.S. than UPS. Amazon previously beat out FedEx in 2020.
The USPS remains the largest parcel delivery service by volume.
FedEx stock has a 54 Composite Rating out of a best-possible 99. Its shares also have a 31 Relative Strength Rating and an 85 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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