Shares of FedEx (FDX) are up 12% after the shipping and logistics giant reported its latest financial results and raised its forward guidance.
The Memphis, Tennessee-based company lifted its full-year earnings guidance as cost-cutting measures offset continued weakness in demand for its services.
FedEx said it now expects earnings per share for all of 2023 between $14.60 U.S. and $15.20 U.S., which is up from a previous forecast of $13 U.S. to $14 U.S.
Analysts who cover the company expected full-year earnings per share of $13.56 U.S., according to Refinitiv data.
In terms of the company’s fiscal third quarter earnings, FedEx reported that it earned $3.41 U.S. per share compared to $2.73 U.S. a share that was expected. Revenue in the quarter amounted to $22.17 billion U.S. versus $22.74 billion U.S. that was forecast on Wall Street.
The company emphasized on an earnings call with analysts and media that it expects to achieve $4 billion U.S. in cost reductions by the end of 2025 as it adjusts to slowing demand.
FedEx announced last month that it is laying off 10% of its officers and directors as part of its plan to reduce costs.
The cost-saving plan has also included cutting flights and grounding airplanes, reducing office space, and adjusting pick-up and delivery times to improve efficiencies.
FedEx said it saved $1.2 billion U.S. in total enterprise costs in its latest quarter. The company expects to save another $50 million U.S. in the current quarter.
Prior to today, FedEx’s stock had declined 11% over the last 12 months and was trading at $204.05 U.S. per share.
