FedEx Corporation (FDX) is the best-performing stock in the S&P 500 after the package delivery firm beat quarterly profit estimates and raised its full-year guidance.
FedEx posted fiscal 2023 third quarter earnings per share (EPS) of $3.41, 25% above forecasts. Revenue fell 6.2% to $22.17 billion, short of expectations.
The company credited the better profit to its cost-cutting measures, which helped offset “continued demand weakness” and inflation. It also boosted shipping prices in January.
FedEx laid off workers, cut flights, grounded planes, reduced office space, and took other steps as part of a plan to reduce expenses by $4 billion a year through the end of 2025.
Cost-Cutting Moves Paying Off
CEO Raj Subramaniam said FedEx "continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year." CFO Mike Lenz added, "Every dollar is under scrutiny."
The company now anticipates 2023 EPS of $14.60 to $15.20, up from its previous outlook of $13 to $14, and also above analysts’ projections.
Shares of FedEx are jumping 8% today, and are 27% higher so far this year.