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• FedEx Corp improved its profit outlook for the full year on Wednesday.
• TD Cowen analyst says it may have benefitted from UPS labour issues in Q1.
• FedEx stock is now up roughly 50% versus the start of the year 2023.

FedEx Corp (FDX) is up 6.0% in extended trading even though weaker demand weighed on its sales in the first quarter.

Why is FedEx stock up in after-hours?

Investors are still content primarily because its cost-cutting initiatives are working well – which made the management improve its full-year profit outlook on Wednesday.  

FedEx is now calling for $17 a share to $18.50 a share of earnings on an adjusted basis in its fiscal 2024. Its previous guidance was for $16.50 to $18.50 instead. According to Raj Subramaniam – its Chief Executive:

 

FedEx is well-positioned to continue to deliver improved profitability while becoming an even more flexible, efficient and data-driven organisation.

The transportation giant may have benefitted from Yellow’s bankruptcy as well as UPS labour issues in its recently concluded quarter, as per Helane Becker – a TD Cowen analyst. She currently rates FedEx stock at “outperform”.

FedEx Q1 financial highlights

• Earned $1.08 billion versus the year-ago $875 million
• Per-share earnings also increased from $3.33 to $4.23
• Adjusted EPS printed at $4.55 as per the press release
• Revenue slipped about 6.0% year-on-year to $21.7 billion
• Consensus was $3.71 a share on $21.74 billion revenue

CEO Subramaniam praised FedEx Ground for “outstanding” performance in the recently concluded quarter. FedEx Express which focuses more on international deliveries also saw an uptick in earnings in Q1.

The demand side of the equation, though, is expected to keep sales flat this year, as per the earnings report. FedEx stock is now up 50% versus the start of 2023.

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