By Esther Fung
FedEx reported higher earnings despite lower demand for parcel deliveries, sending shares in the delivery giant higher in after-hours trading.
The company said it benefitted from savings due to restructuring efforts that include workforce reductions and facility closures. Shares rose more than 12% after the report.
— The Memphis, Tenn.-based company posted a profit of $879 million, or $3.51 a share, in the quarter ended Feb.29, compared with $771 million, or $3.05 a share, a year earlier.
— Stripping out certain one-time items, adjusted per-share earnings came to $3.86, above the $3.29 forecast by analysts, according to FactSet.
— Revenue fell to $21.7 billion from $22.2 billion a year earlier, just short of the $21.97 billion expected by analysts polled by FactSet.
In December the company lowered its outlook for full-year revenue, expecting it to decline in the low-single digits from a year earlier. FedEx added that it will purchase $500 million of shares in the fiscal fourth quarter, which will bring the fiscal 2024 total to $2.5 billion. The board also authorized a new $5 billion share repurchase program.
FedEx delivered another quarter of improved profitability in what remains a difficult demand environment, said Chief Executive Raj Subramaniam in a statement.
The company has been working on a restructuring plan that includes combining its Ground and Express units. It has also parked planes, closed some facilities and laid off workers amid a slump in parcel volume.
Through Thursdays close, shares had gained 5% so far this year, compared with a 10% gain in the S&P 500.