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FedEx Corporation (NYSE:FDX) stock traded in a volatile manner after hours on Tuesday after notching a surprise beat on the bottom line for Q2, but offering light full-year forecasts.
The Memphis-based transportation company posted $3.18 in earnings per share for the fiscal second quarter on $22.8B in revenue. The analyst consensus expectations stood at $2.83 and $23.72B, respectively. Lower global volumes for the Express business was cited as a particular headwind for the company, offsetting some of the cost-saving initiatives pursued by the company.
“The FedEx team moved with urgency to make rapid progress on our ongoing transformation while navigating a weaker demand environment,” CEO Raj Subramaniam said. “Our earnings exceeded our expectations in the second quarter driven by the execution and acceleration of our aggressive cost reduction plans.”
The company expects to garner $1B in cost savings beyond its September forecast, totaling $3.7B in savings as compared to its initial fiscal 2023 business plan. Capital expenditure expectations for the full-year were also reined in to $5.9B from $6.3B.
On the back of those cost cuts, FedEx now expects earnings per diluted share in the range of $13.00 to $14.00 before mark to market retirement plan accounting adjustments and excluding estimated costs related to business optimization initiatives and business realignment activities. Analysts had anticipated $14.12, a figure reeled in significantly in recent months.
“Our teams have an unwavering focus on rapidly implementing cost savings to improve profitability,” CFO Michael C. Lenz said. “As we look to the second half of our fiscal year, we are accelerating our progress on cost actions, helping to offset continued global volume softness.”
Shares wavered in Tuesday’s extended trading, sliding over 3% immediately after the print before pushing about 2% higher as the after hours session progressed.
Read more on the details of the quarter.
