(Corrects headline and paragraph 1 to say FedEx narrowed its 2024 profit forecast range, not raised its forecast)
(Reuters) -FedEx narrowed its fiscal 2024 profit forecast range on Thursday, with the midpoint staying at the same level as its earlier forecast, as the company expects cost cuts to offset a decline in demand from its largest customer, the U.S. Postal Service (USPS).
Shares of the second-largest parcel delivery firm rose 8.5% in after-hours trading.
The company now expects earnings per share for fiscal 2024 to be in the range of $17.25 to $18.25, compared with its prior forecast of $17 to $18.50 per share.
FedEx reported revenue of $21.7 billion for the quarter ended Feb. 29, down from $22.2 billion last year.
FedEx Express said its operating results improved due to lower structural expenses resulting from its cost-cutting initiatives and the benefit from one additional operating day, partially offset by lower revenue.
The company’s Express overnight delivery unit, its biggest, had been struggling with falling volumes as the USPS shifts packages from higher-margin air services to more economical ground services.
Investors are also pressuring FedEx CEO Raj Subramaniam to improve profitability at air-based Express as it undergoes contract renewal talks with USPS and labor discussions with its pilots.
(Reporting by Lisa Baertlein in Long Beach; Ananta Agarwal and Aishwarya Jain in Bengaluru, Editing by Devika Syamnath)
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