FedEx Shares Rise as Profit Jumps After Cutting Costs, Gaining Customers From Rivals

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Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published September 21, 2023
FedEx mail deliver organizes packages at a FedEx facility

Brandon Bell / Staff / Getty Images

Key Takeaways

  • FedEx shares jumped after its profit beat estimates as the package delivery giant cut expenses and gained customers from rivals.
  • The company benefited from fears of a strike at UPS and the bankruptcy of Yellow.
  • FedEx said it believes it can hold onto its new customers, and raised its full-year earnings guidance.

FedEx (FDX) shares jumped after the delivery giant reported better-than-expected profit as it cut costs and benefited from issues with key rivals, and boosted its guidance.

The big package delivery firm posted fiscal 2024 first quarter earnings per share (EPS) of $4.55, a 32% gain from 2022 and above forecasts. Operating margin was 7.3%, also beating estimates. Revenue rose 16.8% to $21.7 billion, in line with expectations.

FedEx noted that its ground unit picked up 400,000 more packages per day as customers concerned about a possible August 1 strike by UPS (UPS) drivers switched carriers. FedEx also gained customers with last month’s bankruptcy by Yellow. 

CEO Raj Subramaniam said the strong results were the result of the increase for FedEx Ground, higher profits at FedEx Express, and “expense controls across the organization.”

The company suggested FedEx could hold onto the customers it added from rivals, despite softening demand contributing to struggles over market share.

FedEx now anticipates full-year EPS in a range of $17.00 to $18.50, up from its previous outlook of $16.50 to $18.50. However, it projects revenue to be flat, compared to its earlier prediction of flat to low-single-digit percentage growth.

Shares of FedEx were up 3.6% in early trading as of 11:45 a.m. ET on Thursday and over 50% higher year-to-date.

FDX YTD

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  1. FedEx. "FedEx Reports Higher First Quarter Diluted EPS of $4.23 and Adjusted Diluted EPS of $4.55."

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