FedEx has reported a significant increase in its net income, with a 14% rise to $879 million in the three months ending Feb. 29 compared to about $771 million in the same period the previous year. This growth in profitability has been met with positive market response, as FedEx’s stock surged more than 12% during after-hours trading on Thursday following the announcement of a better-than-expected third-quarter performance and the introduction of a new $5 billion share buyback program.
Raj Subramaniam, President and CEO of FedEx, expressed satisfaction with the company’s progress, highlighting the ongoing transformation efforts aimed at enhancing the value proposition and customer experience. These initiatives are part of a broader strategy known as DRIVE, launched by FedEx last year, which seeks to achieve cost savings of $4 billion by the end of fiscal year 2025.
The positive outcomes of the DRIVE initiative are becoming increasingly evident, as evidenced by the consecutive growth in operating income and margin expansion for the third quarter, even amidst a challenging revenue environment. Subramaniam emphasized this point during an investor call on Thursday evening, underscoring the company’s ability to deliver financial improvements despite facing headwinds in revenue generation.
FedEx’s third quarter, by the digits
FedEx reported a notable increase in net income, rising by 14% in the three months ending Feb. 29 to $879 million compared to approximately $771 million in the corresponding period the previous year.
However, the company experienced a decline in revenue for the quarter, with a 2% year-over-year drop to $21.7 billion from $22.2 billion.
Despite the dip in revenue, FedEx exceeded Wall Street expectations for diluted earnings per share, achieving $3.86 compared to the consensus estimate of $3.43, as reported by analysts surveyed by FactSet.
FedEx is buying even more of its shares back
FedEx reported a notable increase in net income, rising by 14% in the three months ending Feb. 29 to $879 million compared to approximately $771 million in the corresponding period the previous year.
However, the company experienced a decline in revenue for the quarter, with a 2% year-over-year drop to $21.7 billion from $22.2 billion.
Despite the dip in revenue, FedEx exceeded Wall Street expectations for diluted earnings per share, achieving $3.86 compared to the consensus estimate of $3.43, as reported by analysts surveyed by FactSet.