XM does not provide services to residents of the United States of America.

FedEx eyes fiscal 2025 profit just above Wall St target, shares soar

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>REFILE-UPDATE 4-FedEx eyes fiscal 2025 profit just above Wall St target, shares soar</title></head><body>

Refiles to add dropped "percent" symbol in paragraph 2

By Lisa Baertlein and Ananta Agarwal

June 25 (Reuters) -FedEx FDX.N on Tuesday forecast fiscal 2025 profit above analysts' estimates, and shares in the delivery giant soared as executives said slashing expenses and consolidating operations would bolster returns even as demand remained weak for package deliveries.

Shares of FedEx jumped 14% in extended trading as the Memphis-based company targeted fiscal 2025 earnings of $20 to $22 per share - the midpoint of which was slightly above analysts' estimate of $20.92. The company is also weighing whether to will keep or sell its freight trucking business that generated revenue of $2.3 billion in the latest quarter.

The news helped investors shake off worries that the trends that drove a 10% gain in FedEx shares over the last year were diminishing.

FedEx earnings excluding items grew 7.2% to $1.34 billion, or $5.41 per share, for the fourth quarter that ended on May 31. Operating margin also improved to 8.5% from 8.1% in the year-ago quarter.

"These results are unprecedented in this current environment," FedEx CEO Raj Subramaniam said. "We expect this momentum to continue in fiscal 2025."

The company's largest unit, Express overnight delivery, has struggled with falling volumes as the U.S. Postal Service shifts packages from higher-margin air services to more economical ground services. FedEx's unprofitable U.S. Postal Service contract, which accounted for about $1.75 billion in revenue to FedEx during the postal service's latest fiscal year, will end on Sept. 29.

Express operating margin, excluding items, fell to 4.1% during the quarter, from 5.0% a year earlier.

FedEx previously said that eliminating the costs related to supporting postal service volume will help profitability improve in fiscal 2025 and beyond.

FedEx's "guidance was impressive, in light that it did not renew its contract with the U.S. Postal Service," said Louis Navellier, founder and chief investment officer of asset manager Navellier & Associates, which holds FedEx shares in a fund.

CEO Subramaniam, who succeeded founder Fred Smith two years ago, has been squeezing out costs and merging its separate airplane- and truck-based delivery units amid pressure from activist investors.

But the revenue side of its business remains challenging. Industrial production and parcel shipping demand - two key business drivers - are lackluster as inflation and higher interest rates take a toll.

FedEx revenue hit $22.1 billion in the fourth quarter, up 1% from the year earlier, and slightly above analysts' estimate of $22.06 billion.

Shares in FedEx rose 14.2% to $292.83 in after-hours trading, when stock in rival United Postal Service UPS.N also rose 2.4% to $137.56.

Reporting by Ananta Agarwal in Bengaluru and Lisa Baertlein in Los Angeles; Editing by David Gregorio
Editing by Pooja Desai and Matthew Lewis


Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.