FedEx Expects Fiscal 2025 Profit to Top Estimates on Cost Cuts

FedEx Corp. (FDX) soared in after-hours trading after exceeding analyst expectations for its fiscal 2025 profit forecast. The company is attributing this positive outlook to its ongoing cost-cutting initiatives, aiming to bolster margins even amidst subdued demand for parcel shipping.

Profit Above Analyst Estimates:

• FedEx predicts fiscal 2025 earnings per share (EPS) to range between $20.00 and $22.00.
• The midpoint of this range, at $21.00, sits slightly above the analyst consensus of $20.92 per share.
• This positive outlook is driven by the company's expense reduction program, "DRIVE," which is anticipated to generate $2.2 billion in permanent cost savings throughout the fiscal year.

Revenue Growth and Demand:

• FedEx projects low-to-mid single-digit percentage revenue growth year-over-year for fiscal 2025.
• This indicates a continuation of the sluggish demand environment for parcel shipping.
• Despite the lackluster demand, FedEx is confident that its cost-cutting measures will significantly improve profitability.

Looking Ahead:

The success of FedEx's strategy hinges on its ability to effectively implement cost reductions while maintaining service quality. Investors will be closely monitoring the company's progress throughout the fiscal year.

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