Exploring the Surprise in the US Stock Market: A Look at FedEx's Performance!

Anzo Capital

Anzo Capital Representative
FedEx surprised investors by reporting strong quarterly results driven by cost-cutting measures and customer acquisition from competitors, UPS and Yellow, ahead of the critical holiday season. The company's shares rose by 5.7% to $264.60 in extended trading but closed at $250.52 on 20 Sept.

Key Data Points:

✅ FedEx reported a significant 32% increase in fiscal first-quarter adjusted earnings, reaching $4.55 per share. This exceeded Wall Street expectations by 82% per share.
✅ The Ground unit of FedEx gained approximately 400,000 more daily package pickups as UPS customers shifted their volume to alternative carriers before the expiration of the contract covering UPS's unionised workforce.
✅ FedEx Freight capitalised on the bankruptcy of Yellow, adding an average of 5,000 daily shipments. However, its operating income fell by 26% during the quarter.
✅ FedEx's air-based Express business reported an 18% operating profit gain for the quarter, driven by expense reductions despite a 9% revenue decline.
✅ The company adjusted its fiscal 2024 earnings forecast to a range of $17 to $18.50 per share, increasing the lower end by 50%, attributed to customer gains and cost-efficiency measures.
✅ In response to investor pressure, including from activist investor D.E. Shaw, FedEx plans to repurchase $1.5 billion of common stock in the fiscal year ending in May.

Overall, FedEx's quarterly performance exceeded expectations, with strong earnings growth and strategies in place to address market challenges and enhance shareholder value.

What are your thoughts on what lies ahead? Feel free to share your insights!

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Source: TradingView, Reuters, CNBC
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