Shares of Federal Express (FDX) are up 4% after the shipping and logistics company reported its latest quarterly earnings and announced plans for an additional $1 billion U.S. in cost cuts.
The Memphis, Tennessee-based company said its cost-cutting measures will focus on its Express unit and include the grounding of some airplanes. Other cost cuts include adjustments to the Ground unit in pick-up and delivery.
FedEx has also raised its package-delivery rates. The latest cuts bring the company’s total cost reduction measures this year to $3.7 billion U.S.
The new cost cutting measures come as FedEx announced fiscal second quarter earnings that fell short of Wall Street expectations.
Revenue in the latest quarter totaled $22.8 billion U.S. versus $23.74 billion U.S. that had been expected among analysts.
FedEx’s net income declined to $788 million U.S. in the three months ended November 30, down from $1.04 billion U.S. a year earlier. Earnings per share came in at $3.18 U.S. versus $2.82 U.S. that was expected.
The company’s Express unit was particularly weak in the quarter, with its operating income down 64% from a year ago.
FedEx Ground’s operating income rose 24% from last year, and FedEx freight’s operating income increased 32% year-over-year.
FedEx now forecasts full-year earnings per share of $13 U.S. to $14 U.S., below analysts’ expectations of $14.08 U.S. per share.
Shares of FedEx are down 36% in 2022 and trading at $$164.35 U.S.
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