FedEx 2Q Results Show Early Success of Cost-Cutting Efforts

FedEx’s F2Q bottom-line miss was primarily driven by the impact of severe macro headwinds in its Express unit’s volumes and the inability to move the cost needle as quickly in that segment, say analysts at Evercore ISI in a research note. They say that weak Express margins aren’t indicative of hiccups in FedEx’s cost-saving initiatives, which showed up more clearly in the Ground and Freight segments. The delivery giant did cut its revenue guidance for the second time this year, but its EPS guide remained intact, proving the initial successes of its cost initiatives, say the analysts.

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