Why Is FedEx Stock Rising?

FedEx Stock NYSE:FDX

FedEx Stock (NYSE:FDX) is increasing in value on Thursday afternoon following the company’s announcement of fiscal first-quarter earnings that were better than expected. This comes after the company reported preliminary numbers last week that was less than satisfactory.

According to Benzinga Pro, FedEx reported first-quarter revenue of $23.2 billion, which was below the average projection of $24.01 billion made by analysts. The company reported quarterly adjusted profits of $3.44 per share, which is higher than the consensus estimate of $3.35 per share from industry analysts.

FedEx reported that its quarterly earnings were negatively affected by a slowdown in volume all over the world, which got even worse in the latter weeks of the quarter as a result of the worsening economic situation.

FedEx President and CEO Raj Subramaniam stated that the company is working quickly and agilely to manage a challenging operating environment by pulling cost, commercial, and capacity levers to react to the effects of lower demand. “We’re working quickly and agilely to manage a challenging operating environment,” he said.

Market Analysis of FedEx Stock

FedEx projects that its sales for the fiscal second quarter would fall somewhere between $23.5 billion and $24 billion, which is higher than the expectation of $24.05 billion. The company anticipates adjusted profits per share of $2.75 or higher for the second quarter of the fiscal year.

As a result of a weaker-than-anticipated economic climate, FedEx is concentrating its efforts on reducing costs as quickly as possible in order to bring fiscal 2023 spending in line with demand. The company anticipates a reduction in overall expenses of between $2.2 billion and $2.7 billion for the upcoming fiscal year 2023.

FedEx estimates that it was able to save approximately $300 million during the first quarter. The company’s objective for the second quarter is to realize cost reductions of around $700 million.

FedEx has also stated that it aims to repurchase common FedEx stock (NYSE:FDX) in the amount of $1.5 billion during the fiscal year 2023. The company is planning to repurchase one billion dollars worth of ordinary FedEx stock (NYSE:FDX) during the second quarter.

The price of FedEx stock  (NYSE:FDX) has reached a high of $266.79 over the past 52 weeks and a low of $153.25.

On Thursday afternoon, FedEx shares (NYSE:FDX) were trading at $156.63, which represented a gain of 2.17%.

Featured Image-  Megapixl @ Ricochet69

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.