FedEx increases its 2023 earnings estimate as cost-cutting measures are successful.

 

On Thursday, FedEx increased its full-year earnings estimate, noting that cost-cutting initiatives had partially offset ongoing demand weakness at FedEx Express and other divisions.

 

 

In contrast to its previous estimate of between $13.00 and $14.00, FedEx now anticipates adjusted profits per share for fiscal 2023 to range between $14.60 and $15.20. Refinitiv consensus forecasts indicate that $13.56 in EPS for the entire year was what Wall Street had anticipated.

 

CFO Mike Lenz stated, "We are holistically adjusting to the expense basis on all dimensions and all areas. Every dime is being examined.

 

The company's stock soared more than 11% in after-hours trading.

 

In comparison to Refinitiv, here is how FedEx fared in its fiscal third quarter of 2023:

 

Earnings per share: adjusted $3.41 vs. anticipated $2.73

Revenue: $22.17 billion versus the anticipated $22.74 billion

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FedEx's net gain for the quarter was $771 million, compared to $1.11 billion for the same quarter a year earlier. FedEx reported per-share profits of $3.41 after one-time items were taken into account, beating estimates, but significantly below the $4.59 per share it reported for the same period last year.

 

 

The business reiterated on Thursday that it anticipates cutting costs by more than $4 billion by the conclusion of the current fiscal year.

 

"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.

 

FedEx, headquartered in Memphis, Tennessee, announced last month that it would fire 10% of its officers and directors as

 

According to Subramanian, the business has cut its overall enterprise costs by $1.2 billion since last year. FedEx cut back on flight hours this quarter by 8% and salary and compensation costs by 4%. In the fourth quarter, it intends to park more planes, and flight hours are anticipated to fall by double digits.

 

 

After cutting back on some domestic pickup and delivery routes and increasing courier productivity, the business anticipates making another $50 million in savings the following quarter.

 

In order to balance out cooling demand, FedEx increased shipping rates by an average of 6.9% in January. On Thursday, FedEx announced an 11% rise in revenue per shipment during its fiscal third quarter.

 

The company also said it anticipates volumes to improve in the current quarter and into its fiscal first quarter of next year.