FedEx (FDX) posted better-than-expected fourth quarter earnings Thursday, while publishing a robust near-term outlook, as internal cost efficiencies helped offset lower shipment demand linked to the global economic slowdown.
FedEx said adjusted earnings for the three months ending in May came in at $6.87 per share, a 37.1% increase from the same period last year that essentially matched the Street consensus forecast of $6.87 per share. Group revenues, FedEx said, rose 8.1% from last year to $24.4 billion, narrowly topping analysts' estimates of a $24.05 billion tally.
Looking into the group's coming fiscal year, which ends in February of 2023, FedEx said it sees earnings in the region of $22.45 to $24.45 per share, well ahead of Refinitiv forecasts, adding it expects to repurchase around $1.5 billion of stock over the final six months of the coming financial year.
“Our fiscal 2022 financial performance was a result of our team's ability to adapt to a number of unexpected challenges and is a testament to the FedEx value proposition and the execution of our long-term strategy,” said CEO Raj Subramaniam.
“Our foundational investments have set the stage for a strong fiscal 2023. As we move forward, our focus will be on revenue quality and lowering our cost to serve. I am honored to lead our dedicated global team who enable FedEx to lead the industry from a position of strength.”
FedEx shares were marked 2.05% higher in after-hours trading immediately following the earnings release to indicate a Friday opening bell price of $232.80 each.
Last week, the group pledged to add three new members to its board of directors while reducing its planned capex-to-revenue targets in order to return more cash to investors and aligning executive pay more closely to shareholder returns.
FedEx also boosted its quarterly dividend by more than 53%, to $1.15 per share, sending the stock on his highest single-day gain, in percentage terms, since the mid-1980s.
Founder and former CEO Smith, 77, was replaced by chief operating officer Raj Subramaniam in late March.
Subramaniam, a long-time FedEx executive who has toiled in the group's complicated supply chain, will assumed CEO duties on June 1.
The 54-year-old Subramaniam faces many of the same challenges in his new role as investors look for profit margin improvement in FedEx's Ground division, which continues to lag rival United Parcel Service (UPS) amid rising labor and transport fuel costs.
