(Reuters) -FedEx forecast fiscal 2025 profit above analysts’ estimates on Tuesday, anticipating that the cost reductions planned for the year would deliver margin gains even as revenue remains challenged by lackluster demand for parcel shipping.
Shares of FedEx were up 15.3% at $295.49 in extended trading after the delivery company targeted fiscal 2025 earnings of $20 to $22 per shares – the midpoint of which was slightly above analysts’ estimate of $20.92. That helped investors shake off worries that gains from slashing costs and merging operations were diminishing.
Memphis-based FedEx’s earnings excluding items grew to $1.34 billion, or $5.41 per share, for the fourth quarter that ended on May 31. That was up from $1.25 billion, or $4.94 per share, a year earlier.
Operating margin also improved to 8.5% from 8.1%.
“These results are unprecedented in this current environment,” FedEx CEO Raj Subramaniam said. “We expect this momentum to continue in fiscal 2025.”
At the close of trading on Tuesday, FedEx shares had posted a 12-month gain of 10%, versus a 20% drop for rival United Parcel Service.
(Reporting by Ananta Agarwal in Bengaluru and Lisa Baertlein in Los AngelesEditing by Pooja Desai and Matthew Lewis)
