FedEx (FDX, Financial) reported quarterly earnings that surpassed market expectations and announced the completion of its $4 billion cost-cutting target. The company also plans to save an additional $1 billion in the new fiscal year. However, the stock dropped over 5% in after-hours trading due to profit guidance falling slightly below Wall Street expectations. The stock has declined over 18% year-to-date.
CEO Raj Subramaniam expressed confidence in the company's transformation strategy, which focuses on integrating operational networks and optimizing service costs. For the fourth fiscal quarter ending May 31, FedEx reported a net profit of $1.65 billion, or $6.88 per share, up from $1.47 billion, or $5.94 per share, a year earlier. Adjusted earnings per share were $6.07, exceeding analyst expectations of $5.84. Revenue reached $22.22 billion, slightly higher than the previous year's $22.1 billion, and above market expectations of $21.79 billion.
FedEx's capital expenditure for fiscal 2025 is projected to decrease to $4.1 billion, a 22% reduction from the previous year. This is part of the DRIVE transformation plan aimed at enhancing long-term profitability. The company confirmed it has achieved the $4 billion cost reduction target set for the end of fiscal 2025 ahead of schedule.
For fiscal 2026, FedEx has proposed an additional $1 billion cost-cutting plan, with revenue expected to remain flat or increase by 2% in the first quarter, outperforming market expectations of a 0.1% decline. However, adjusted earnings per share are forecasted to be between $3.40 and $4.00, slightly below the market's $4.06 expectation.
