On December 19, 2024, FedEx Corp (FDX, Financial) released its 8-K filing for the second quarter ended November 30, 2024. The company reported a diluted EPS of $3.03 and an adjusted diluted EPS of $4.05, surpassing the analyst estimate of $3.82. Revenue for the quarter was $22.0 billion, slightly below the estimated $22,111.52 million.
Company Overview
FedEx Corp (FDX, Financial), a pioneer in overnight delivery since 1973, remains the world's largest express package provider. In fiscal 2024, which ended in May, FedEx derived 47% of its revenue from its express division, 37% from ground, and 10% from freight. The company also offers services through FedEx Office and FedEx Logistics. The acquisition of TNT Express in 2016 bolstered its European presence.
Performance and Challenges
FedEx Corp (FDX, Financial) faced several operational challenges during the quarter, including weak U.S. domestic demand and the expiration of its U.S. Postal Service contract. Despite these hurdles, the Federal Express segment achieved operating profit growth. The company's efforts to transform operations are yielding results, as highlighted by Raj Subramaniam, FedEx Corp's president and CEO, who stated,
Our second quarter results demonstrate that our efforts to transform our operations are working."
Financial Achievements
FedEx Corp (FDX, Financial) completed $1 billion in share repurchases during the quarter, which positively impacted the diluted EPS by $0.07 per share. The company plans to repurchase an additional $500 million of common stock in fiscal 2025. As of November 30, 2024, FedEx had $5.0 billion in cash on hand, providing a strong liquidity position.
Income Statement Highlights
The company's revenue for the quarter was $22.0 billion, slightly down from $22.2 billion in the same quarter last year. Operating income was reported at $1.05 billion, with an adjusted figure of $1.38 billion. The operating margin stood at 4.8%, with an adjusted margin of 6.3%. Net income was $0.74 billion, with an adjusted net income of $0.99 billion.
| Metric | Fiscal 2025 (GAAP) | Fiscal 2025 (Adjusted) | Fiscal 2024 (GAAP) | Fiscal 2024 (Adjusted) |
|---|---|---|---|---|
| Revenue | $22.0 billion | $22.0 billion | $22.2 billion | $22.2 billion |
| Operating Income | $1.05 billion | $1.38 billion | $1.28 billion | $1.42 billion |
| Net Income | $0.74 billion | $0.99 billion | $0.90 billion | $1.01 billion |
| Diluted EPS | $3.03 | $4.05 | $3.55 | $3.99 |
Analysis and Outlook
FedEx Corp (FDX, Financial) is navigating a challenging demand environment, particularly in the U.S. domestic market. The company's strategic initiatives, including cost reductions from the DRIVE program, are crucial for maintaining profitability. The decision to pursue a full separation of FedEx Freight into a new publicly traded company is a significant strategic move, expected to enhance focus and operational efficiency.
FedEx has revised its fiscal 2025 earnings outlook, now expecting diluted EPS of $16.45 to $17.45 before adjustments, compared to the previous forecast of $17.90 to $18.90. The company remains committed to its capital spending plans, focusing on network optimization and efficiency improvements.
FedEx Corp (FDX, Financial) continues to demonstrate resilience in a challenging market, leveraging its global network and strategic initiatives to drive long-term growth and shareholder value.
Explore the complete 8-K earnings release (here) from FedEx Corp for further details.
