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Consumer Financial Protection Bureau Director Rohit Chopra released an update today on the bureau’s Personal Financial Data Rights rule-sharing based on his remarks given March 13 at the Financial Data Exchange Global Summit in Washington, D.C. Chopra discussed at the FDX event how the bureau is identifying standard-setting organizations. FDX, a financial services consortium, […]
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Whitney McDonald
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U.S. stock indexes were higher on Wednesday as Wall Street tried to build on their year-end rally with a fresh record in sight for the S&P 500 index.
On Tuesday, the Dow booked a fifth straight record close, while the S&P 500 rose and the Nasdaq extended its winning streak to a ninth day.
U.S. stocks were edging higher on Wednesday with the S&P 500 less than 1% shy of the all-time closing high of 4796.56 it recorded at the start of January 2022, while the Dow industrials and Nasdaq were struggling to extend their nine consecutive daily gains.
The Wall Street large-cap benchmark S&P 500 has jumped 24.3% this year, partially powered by hopes that the U.S. economy has not been too badly damaged by the Federal Reserve’s ratcheting up of interest rates to cool inflation.
The latest leg of the rally reflects hopes that with inflation back down to 3.1%, the central bank will begin quickly trimming borrowing costs next year. Not even an concerted effort by Fed officials to counter the market’s rate-cut optimism has damped trader’s ardor.
This dismissal of less-dovish Fedspeak has left some observers bemused.
“Investors are dreaming of aggressive rate cuts in an environment of strong economic growth, and that is not the right recipe for easing inflation and keeping it sufficiently low,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “The robust economic data and high earnings expectations are not compatible with a dovish Fed,” she said.
See: Why the 60-40 portfolio is poised to make a comeback in 2024
Perhaps the current bullishness is also reflective of seasonal trends, with optimism about a festive bounce underpinning stocks. The “Santa Claus Rally” period stretches from the last five trading days of the year and first two trading days of the new year, according to the Stock Trader’s Almanac.
Since 1950, the S&P 500 has averaged a gain of 1.32% and closed higher 78.1% of the time over that period, according to Dow Jones Market Data.
In U.S. economic data, existing-home sales rose 0.8% in November to 3.82 million, the National Association of Realtors said on Wednesday. Sales of previously owned homes unexpectedly inched up last month, snapping a five-month slump as easing mortgage rates encouraged some U.S. homebuyers.
Meanwhile, U.S. consumer confidence index rose to 110 in December, up from a downwardly revised 101 in the previous month, the Conference Board said Wednesday.
“The consumer is feeling pretty well as rates move lower, employers add to their payroll, and income expectations improve,” said Jeffrey J. Roach, chief economist at LPL Financial. “So far, investors have a green light as they merge into the new year.”
That said, investors will continue seeking guidance from more economic data due later this week that may provide more clarity on the Fed’s interest-rate path in 2024. A revision of third-quarter GDP print is expected on Thursday morning, followed by Friday’s personal consumption expenditure (PCE) inflation report — the Fed’s preferred inflation gauge.
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Dec 19, 2023, 4:31 am EST
Stock futures traded flat Tuesday, a day after the S&P 500 finished up 0.5% and moved closer to its all-time. The broad market index stands just 1.2% below its record of 4,796.56 reached in early January 2022.
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Amazon.com Inc.
AMZN,
has relaunched its Amazon Shipping delivery service after a pandemic-era pause, the company confirmed on Friday. The news, reported on earlier in the day by the Wall Street Journal, marks the return of a segment of the online retailer that went head-to-head with the likes of FedEx Corp.
FDX,
and United Parcel Service Inc.
UPS,
The service, which processes packages sold via Amazon and other outlets, is now running in most of the U.S., the Journal said. The shipping segment was put on halt after being overwhelmed by the boom in online demand during the pandemic, the Journal said. “We’re always working to develop new, innovative ways to support Amazon’s selling partners, and Amazon Shipping is another option for shipping packages to customers quickly and cost-effectively,” Amazon spokesperson Olivia Connors said in a statement. “We’ve been providing this service for a while with positive feedback so we’re now making it available to more selling partners.” Shares of Amazon were 0.1% lower after hours on Friday.
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Mather Group LLC. acquired a new stake in shares of FedEx Co. (NYSE:FDX – Free Report) in the 1st quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund acquired 1,425 shares of the shipping service provider’s stock, valued at approximately $326,000.
A number of other hedge funds and other institutional investors have also added to or reduced their stakes in FDX. Lakewood Asset Management LLC purchased a new stake in FedEx during the fourth quarter valued at approximately $26,000. Guardian Wealth Advisors LLC purchased a new stake in FedEx during the first quarter valued at approximately $26,000. GW&K Investment Management LLC purchased a new stake in FedEx during the first quarter valued at approximately $27,000. Horan Securities Inc. increased its holdings in FedEx by 85.7% during the first quarter. Horan Securities Inc. now owns 130 shares of the shipping service provider’s stock valued at $30,000 after buying an additional 60 shares during the last quarter. Finally, Sound Income Strategies LLC boosted its position in shares of FedEx by 1,957.1% in the first quarter. Sound Income Strategies LLC now owns 144 shares of the shipping service provider’s stock worth $33,000 after purchasing an additional 137 shares during the period. 73.39% of the stock is owned by hedge funds and other institutional investors.
Shares of NYSE FDX opened at $265.77 on Monday. The company has a debt-to-equity ratio of 0.78, a quick ratio of 1.33 and a current ratio of 1.37. The business’s 50 day moving average price is $249.26 and its 200-day moving average price is $228.85. FedEx Co. has a fifty-two week low of $141.92 and a fifty-two week high of $270.95. The company has a market cap of $66.84 billion, a price-to-earnings ratio of 17.15, a PEG ratio of 1.28 and a beta of 1.35.
FedEx (NYSE:FDX – Get Free Report) last released its quarterly earnings data on Tuesday, June 20th. The shipping service provider reported $4.94 EPS for the quarter, topping the consensus estimate of $4.85 by $0.09. The company had revenue of $21.93 billion for the quarter, compared to the consensus estimate of $22.55 billion. FedEx had a return on equity of 15.32% and a net margin of 4.41%. FedEx’s quarterly revenue was down 10.1% on a year-over-year basis. During the same period last year, the business posted $6.87 EPS. On average, sell-side analysts expect that FedEx Co. will post 17.3 earnings per share for the current year.
A number of equities analysts have weighed in on the stock. Sanford C. Bernstein upped their price target on shares of FedEx from $261.00 to $284.00 in a research report on Wednesday, June 21st. Loop Capital dropped their price target on shares of FedEx from $263.00 to $255.00 in a research report on Thursday, June 22nd. UBS Group upped their price target on shares of FedEx from $260.00 to $272.00 in a research report on Wednesday, June 21st. StockNews.com upgraded shares of FedEx from a “hold” rating to a “buy” rating in a research report on Friday, August 4th. Finally, Stifel Nicolaus upped their target price on shares of FedEx from $259.00 to $288.00 in a research report on Wednesday, July 26th. Nine research analysts have rated the stock with a hold rating and sixteen have assigned a buy rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $246.14.
View Our Latest Research Report on FDX
In other FedEx news, VP Jennifer L. Johnson sold 10,801 shares of the firm’s stock in a transaction on Tuesday, June 27th. The stock was sold at an average price of $238.61, for a total transaction of $2,577,226.61. Following the transaction, the vice president now directly owns 3,196 shares in the company, valued at approximately $762,597.56. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. In other news, VP Jennifer L. Johnson sold 10,801 shares of FedEx stock in a transaction on Tuesday, June 27th. The stock was sold at an average price of $238.61, for a total value of $2,577,226.61. Following the transaction, the vice president now directly owns 3,196 shares in the company, valued at approximately $762,597.56. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Robert B. Carter sold 19,270 shares of FedEx stock in a transaction on Wednesday, June 28th. The shares were sold at an average price of $246.00, for a total value of $4,740,420.00. Following the completion of the transaction, the executive vice president now owns 58,875 shares in the company, valued at $14,483,250. The disclosure for this sale can be found here. Insiders have sold 35,816 shares of company stock worth $8,822,147 in the last ninety days. 8.73% of the stock is owned by company insiders.
FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates through FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services segments. The FedEx Express segment offers express transportation, small-package ground delivery, and freight transportation services; and time-critical transportation services.
Want to see what other hedge funds are holding FDX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for FedEx Co. (NYSE:FDX – Free Report).
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Package-delivery giant United Parcel Service Inc. and the Teamsters union on Tuesday said they had reached a tentative five-year labor agreement that would boost jobs, pay and other protections, after increasingly vocal threats of a strike reignited concerns about the impact to the economy and the nation’s shipping ecosystem.
Teamster locals in the U.S. and Puerto Rico will now meet on July 31 to review and recommend the tentative deal, which will cover 340,000 workers, the Teamsters said in a release. Rank-and-file members will vote on the deal starting on Aug. 3, with the voting process running until Aug. 22.
Under the deal’s terms, current full and part-time UPS
UPS,
workers in the Teamsters union will get $2.75 more per hour this year, and $7.50 more over the course of the contract, according to a release.
Current part-timers would have their pay raised to at least $21 per hour immediately, with a 48% average total wage hike over the next five years. New part-time hires would start at $21 per hour and advance to $23 per hour, the Teamsters said.
Full-time UPS delivery drivers in the Teamsters union would see their average top pay rate rise to $49 per hour.
The deal also ends a two-tier wage system at UPS and makes Martin Luther King Day a holiday for union members. UPS will also outfit newer delivery vehicles with air conditioning and cargo ventilation. The deal also ends forced overtime on union members’ days off.
Shares of UPS were up 0.8% in afternoon trade. Shares of rival FedEx Corp.
FDX,
were up 0.5%.
Talks between UPS and the union began in April. Some Wall Street analysts expected both sides to reach a deal, despite a more hardline stance from Teamster leadership.
“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits,” Teamsters General President Sean O’Brien said in a statement.
“Teamster labor moves America,” he continued. “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations.”
UPS Chief Executive Carol Tome, in a separate statement, also praised the deal.
“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” she said.
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UMB Bank n.a. trimmed its stake in shares of FedEx Co. (NYSE:FDX – Get Rating) by 2.1% during the first quarter, according to the company in its most recent 13F filing with the SEC. The firm owned 18,301 shares of the shipping service provider’s stock after selling 399 shares during the quarter. UMB Bank n.a.’s holdings in FedEx were worth $4,182,000 as of its most recent SEC filing.
Other institutional investors have also added to or reduced their stakes in the company. Lakewood Asset Management LLC bought a new position in shares of FedEx in the fourth quarter valued at approximately $26,000. CenterStar Asset Management LLC bought a new position in FedEx in the 4th quarter valued at $29,000. My Personal CFO LLC purchased a new position in shares of FedEx during the 4th quarter valued at $31,000. Householder Group Estate & Retirement Specialist LLC increased its holdings in shares of FedEx by 163.9% in the fourth quarter. Householder Group Estate & Retirement Specialist LLC now owns 190 shares of the shipping service provider’s stock worth $33,000 after purchasing an additional 118 shares during the period. Finally, Sound Income Strategies LLC raised its position in shares of FedEx by 1,957.1% in the first quarter. Sound Income Strategies LLC now owns 144 shares of the shipping service provider’s stock worth $33,000 after buying an additional 137 shares in the last quarter. Hedge funds and other institutional investors own 73.39% of the company’s stock.
A number of brokerages have weighed in on FDX. Loop Capital upped their target price on FedEx from $241.00 to $263.00 in a research note on Thursday, April 6th. BMO Capital Markets lifted their target price on shares of FedEx from $235.00 to $260.00 in a research report on Thursday, April 6th. Barclays increased their price target on shares of FedEx from $240.00 to $280.00 and gave the stock an “overweight” rating in a report on Friday, March 17th. The Goldman Sachs Group lifted their price objective on shares of FedEx from $250.00 to $258.00 and gave the stock a “buy” rating in a report on Thursday, April 6th. Finally, Stifel Nicolaus raised their price target on FedEx from $242.00 to $264.00 in a research report on Thursday, April 6th. Ten investment analysts have rated the stock with a hold rating and eighteen have given a buy rating to the company. According to MarketBeat.com, FedEx currently has a consensus rating of “Moderate Buy” and a consensus price target of $244.21.
Shares of FDX opened at $231.79 on Wednesday. FedEx Co. has a one year low of $141.92 and a one year high of $248.76. The company has a 50-day simple moving average of $226.93 and a two-hundred day simple moving average of $208.40. The company has a debt-to-equity ratio of 0.81, a current ratio of 1.32 and a quick ratio of 1.27. The firm has a market capitalization of $58.26 billion, a PE ratio of 20.02, a price-to-earnings-growth ratio of 1.06 and a beta of 1.33.
FedEx (NYSE:FDX – Get Rating) last released its quarterly earnings results on Tuesday, June 20th. The shipping service provider reported $4.94 earnings per share for the quarter, beating the consensus estimate of $4.85 by $0.09. The company had revenue of $21.93 billion for the quarter, compared to analyst estimates of $22.55 billion. FedEx had a return on equity of 17.71% and a net margin of 3.23%. The firm’s revenue was down 10.1% on a year-over-year basis. During the same period in the previous year, the company posted $6.87 earnings per share. On average, analysts anticipate that FedEx Co. will post 14.89 EPS for the current fiscal year.
The firm also recently declared a quarterly dividend, which will be paid on Monday, July 3rd. Investors of record on Monday, June 12th will be given a dividend of $1.26 per share. This is a boost from FedEx’s previous quarterly dividend of $1.15. This represents a $5.04 dividend on an annualized basis and a yield of 2.17%. The ex-dividend date is Friday, June 9th. FedEx’s dividend payout ratio (DPR) is 43.52%.
In other news, CEO Frederick W. Smith sold 131,755 shares of FedEx stock in a transaction that occurred on Tuesday, April 11th. The shares were sold at an average price of $232.21, for a total transaction of $30,594,828.55. Following the completion of the transaction, the chief executive officer now directly owns 14,459,759 shares in the company, valued at $3,357,700,637.39. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. In other news, CEO Frederick W. Smith sold 131,755 shares of the stock in a transaction on Tuesday, April 11th. The stock was sold at an average price of $232.21, for a total value of $30,594,828.55. Following the sale, the chief executive officer now directly owns 14,459,759 shares of the company’s stock, valued at $3,357,700,637.39. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Stephen E. Gorman purchased 1,080 shares of the stock in a transaction dated Wednesday, April 12th. The stock was bought at an average cost of $230.75 per share, with a total value of $249,210.00. Following the transaction, the director now owns 1,258 shares in the company, valued at $290,283.50. The disclosure for this purchase can be found here. Insiders have sold 146,486 shares of company stock valued at $34,001,009 over the last quarter. Corporate insiders own 8.62% of the company’s stock.
FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. The company’s FedEx Express segment offers express transportation, small-package ground delivery, and freight transportation services; time-critical transportation services; and cross-border enablement, technology, and e-commerce transportation solutions.
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Shares of FedEx Corp. fell after hours on Tuesday after the package deliverer offered up a full-year profit forecast that fell short of expectations, as Wall Street zeroes in on the company’s efforts to cut billions in costs over its next two fiscal years following a drop-off in consumer demand.
Not long after the company released those results, FedEx also said
FDX,
that Chief Financial Officer Michael Lenz would retire on July 31. Management said it had begun an external search to fill the position. Lenz, who became CFO in March 2020, will serve as a senior adviser until Dec. 31 to help with the changeover.
The company reported fourth-quarter net income of $1.54 billion, or $6.05 a share, compared with $558 million, or $2.13 a share, in the same quarter last year. Revenue fell to $21.9 billion, compared with $24.4 billion in the prior-year quarter.
Adjusted for goodwill, efforts to slim the business and a legal issue within FedEx’s
FDX,
ground delivery operations, FedEx earned $4.94 a share, compared with $6.87 a year ago.
Analysts polled by FactSet expected adjusted earnings per share of $4.85, on revenue of $22.55 billion.
“The quarter’s results were negatively affected by continued demand weakness and cost inflation, partially offset by cost-reduction actions and U.S. domestic package yield improvement,” management said in a statement.
For the fiscal year ahead, which ends next May, FedEx forecast “flat to low-single-digit-percent” growth in sales, with earnings per share of $16.50 to $18.50. The company said it expects permanent reductions from its cost-cutting program — which it calls “DRIVE” — of $1.8 billion.
For the full year, analysts expect FedEx to earn $18.33 a share, on $90.91 billion in sales. FedEx ended its most recent fiscal year with $90.2 billion in sales.
Shares fell 4% after hours.
FedEx since last year has tried to slash billions in costs amid slowing demand for package deliveries, after inflation forced customers to rethink their spending priorities. It has nudged shipping prices higher, cut flights, cut executive jobs and closed offices. In April, FedEx announced plans to consolidate its air and ground operations into a single organization.
In the process, the delivery service’s stock price has rebounded significantly since getting slammed in September, when it warned of a slowdown in shipping demand. That rebound has put the stock in roughly in the same spot it was a year ago.
The company also reported earnings amid other tensions within the nation’s shipping and transportation infrastructure, after online-shopping demand during the pandemic led to higher shipping prices and thus a surge in profits.
While West Coast dockworkers and their employers reached a tentative deal on a contract last week, Teamsters union members at FedEx’s main rival, United Parcel Service Inc.
UPS,
voted to authorize a strike if UPS doesn’t offer them a contract they don’t like. The friction has led to worries that businesses and customers would have to pay more to have products delivered.
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U.S. stocks ended lower Friday as worries about banking-sector stability reemerged following a bankruptcy filing by SVB Financial Group and the release of data showing banks borrowed $165 billion from the Federal Reserve over the past week.
For the week, the Dow fell 0.1%, the S&P 500 gained 1.4% and the Nasdaq climbed 4.4%, according to Dow Jones Market Data. The Dow booked back-to-back weekly losses while the Nasdaq saw its biggest weekly percentage gain since January.
U.S. stocks fell Friday as worries about the banking sector persisted.
“The markets are up and down all this week, and they’re moving typically in big amounts, because there really isn’t any consensus on how the strains in the banking system will play” into the economy, said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, in a phone interview Friday. Investors are trying to get a sense for how quickly the economy may be slowing and whether the problems in the banking sector will lead to an “accelerated slowing,” he said.
Concerns about the banking sector’s ability to withstand deposit flight reemerged Friday morning after SVB Financial Group
SIVB,
announced it had filed for Chapter 11 bankruptcy protection. SVB is the holding company of Silicon Valley Bank , which was put into FDIC receivership last Friday.
On Thursday, First Republic Bank announced that it would receive $30 billion of uninsured deposits from a group of large U.S. banks. JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. were among the 11 banks that agreed to provide the deposits.
Meanwhile, Federal Reserve data released Thursday afternoon in New York showed banks borrowed a combined $165 billion from the central bank. Most of the borrowing occurred via the Fed’s discount window. But a small amount was also tapped through the Fed’s new Bank Term Funding Program that allows bonds trading at a discount to be used as collateral, at par value. The fact that borrowing through the discount window has soared to a record high was adding to the market’s concerns about the banking sector, analysts said.
See: Banks have borrowed $165 billion from the Fed in past week after SVB failure
First Republic Bank
FRC,
shares plunged 32.8% Friday, while Credit Suisse Group
CS,
which earlier this week got a lifeline from the Swiss National Bank, closed 6.9% lower, according to FactSet data.
At least four major banks have put restrictions on trades that involve troubled Swiss lender Credit Suisse Group or its securities, Reuters reported Friday, citing people with direct knowledge of the matter.
“I think there are still a lot of questions right now,” said Mark Luschini, chief investment strategist at Janney, during a phone interview with MarketWatch. “Investors can’t seem to hold their enthusiasm for equities for longer than a 24-hour news cycle.”
It’s not hard to understand why investors are still so anxious about the banking sector given the surge in borrowing from the Fed, said Matt Maley, chief market strategist at Miller Tabak + Co.
“Given that banks borrowed over $150bn at the Fed’s discount window on Wednesday, which compares to $4.4bn the week before, one can understand why investors are worried that the situation might be a bit more dire than the authorities are admitting to right now,” Maley said in emailed commentary.
In economic news, the Conference Board said Friday that the U.S. leading economic index fell 0.3% in February, marking the 11th straight monthly decline. U.S. industrial production was flat in February, data released Friday by the Fed show.
Meanwhile, the University of Michigan’s latest reading on consumer sentiment showed consumers were more downbeat in March than at ay time in the last four months.
While stocks fell Friday, they finished the week mostly higher. The Dow Jones Industrial Average slipped 0.1% for the week, while the S&P 500 booked a 1.4% weekly gain and the technology-heavy Nasdaq Composite saw a weekly rise of 4.4%, according to Dow Jones Market Data.
—Steve Goldstein contributed to this report.
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Stock futures rose Friday as the biggest banks in the U.S. moved to rescue beleaguered First Republic Bank.
These stocks were poised to make moves Friday:
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Shares of FedEx Corp. jumped after hours on Thursday after the package deliverer reported third-quarter results that beat expectations and raised its profit forecast, as it tries to battle weaker demand with aggressive cost cuts.
FedEx FDX reported fiscal third-quarter net income of $771 million, or $3.05 a share, compared with $1.11 billion, or $4.20 a share, in the same quarter last year. Revenue fell to $22.2 billion, compared with $23.6 billion in the same quarter last year.
Adjusted…
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FedEx Corp. on Tuesday said it planned to slash an extra $1 billion in costs beyond what it outlined in September, amid what management called a “weaker demand environment” that led to softer-than-expected sales for its second quarter.
Still, shares rallied after hours, as investors and analysts focused on the parcel-delivery service’s profit forecast. And the company still managed to squeeze more consumer dollars out of each delivery as package volumes slipped — helped by the surcharges that carriers tack on to bills to offset rising fuel costs.
The company reported earnings as investors looked for clues about holiday spending in an economy where just about everything is more expensive, and as FedEx
FDX,
prepares to raise shipping prices next month.
During FedEx’s conference call to discuss its results, executives described an environment where global demand fell further in the second quarter than it did during a particularly harsh first quarter that sank its stock. While they said package volumes, comparatively, would improve later on in the fiscal year, they said they hadn’t seen much of a change in business yet in China, even as the economy there reopens after pandemic-related lockdowns.
Meanwhile, they said the U.S. was still recalibrating after consumers loaded up on electronics, furniture and other goods bought online during the pandemic.
“I think the main macro issue in the United States is really the e-commerce reset,” Chief Executive Raj Subramaniam said during the call.
The extra billion in savings brings FedEx’s total expected cuts to roughly $3.7 billion for the fiscal year, which ends in May. In September, the company announced up to $2.7 billion in cost cuts for the fiscal year ahead as concerns grew about stalled shipping demand in an inflation-scarred economy.
FedEx also lowered its fiscal 2023 capital spending forecast by $400 million and unveiled a new long-term cost-saving program, called DRIVE, which it hopes will bring more than $4 billion in annualized structural cost savings by fiscal 2025. The company said more details on DRIVE would come during a conference call in the first half of the next calendar year.
Subramaniam said some of FedEx’s cuts would come from digitization and automation in the U.S. and Europe, and other technology that helps trucks deliver more packages per trailer. FedEx has already grounded jets and reduced flights in its large, internationally-focused Express segment, which offers expedited air and ground deliveries. Cuts elsewhere will come from halting Sunday operations in its ground service, where trucks ship goods in the U.S. and Canada, and closing locations that offer copying and printing services, FedEx said in September.
Subramaniam on Tuesday also said that service issues that hurt the company’s results in the prior quarter had improved, and that hangups at Charles De Gaulle airport in Paris had been “largely alleviated.”
For the full year, FedEx forecast earnings per share of $13 to $14. For the full fiscal year, FactSet forecast adjusted earnings of $13.93 a share, with revenue of $94.358 billion.
“While modestly below consensus at the mid-point . . . our sense is that this is in line with (or maybe a bit better than) buyside expectations,” Stephens analyst Jack Atkins said in a note Tuesday, adding that the outlook included the $3.7 million in reductions.
“Net, with most investors sitting this quarter out and the company issuing an outlook that was likely better than some feared, we think the stock reacts positively to these results tomorrow,” he continued.
Shares rose 4.8% in after-hours trade.
FedEx reported fiscal second-quarter net income of $788 million, or $3.07 a share, compared with $1 billion, or $3.88 a share, in the same quarter last year. Revenue slipped to $22.8 billion, compared with $23.5 billion in the prior-year quarter.
Adjusted for costs related to “business optimization,” FedEx earned $3.18 a share, compared with $4.83 the same quarter in 2021.
Analysts polled by FactSet expected FedEx to report adjusted earnings of $2.81 a share on sales of $23.7 billion.
“The FedEx team moved with urgency to make rapid progress on our ongoing transformation while navigating a weaker demand environment,” Subramaniam said in FedEx’s earnings release. “Our earnings exceeded our expectations in the second quarter, driven by the execution and acceleration of our aggressive cost-reduction plans.”
Management said that its Express segment suffered a 64% decline in operating income, as global package volumes fell. But yields — or sales per package, and a measure of how high a price FedEx can charge — rose 8%. Higher fuel surcharges helped that yield figure.
The company’s Ground division, where trucks ship packages in the U.S. and Canada, got a 24% boost in operating income. Cost cuts and a 13% increase in yields helped there, even as package also volumes slipped.
FedEx stock has fallen 35% this year. By comparison, the S&P 500 Index
SPX,
is down around 19%.
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FedEx Corp. provides a broad portfolio of transportation, e-commerce and business services under the FedEx brand. It operates through the following segments: FedEx Express, FedEx Ground, FedEx Freight, FedEx Services, and Corporate, Other & Eliminations. The FedEx Express segment consists of domestic and international shipping services for delivery of packages and freight. The FedEx Ground segment focuses on small-package ground delivery services. The FedEx Freight segment offers less-than-truckload freight services across all lengths of haul. The FedEx Services segment provides sales, marketing, information technology, communications, customer service, technical support, billing and collection services, and certain back-office functions. The Corporate, Other & Eliminations segment includes corporate headquarters costs for executive officers and certain legal and finance functions, as well as certain other costs and credits not attributed to the firm’s core business. The company was founded by Frederick Wallace Smith on June 18, 1971, and is headquartered in Memphis, TN.
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