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FedEx Shares Soar 5.8% as Sales Outlook Surpasses Estimates
September 21, 2023
FedEx Stocks Rise After-Hours
FedEx (FDX) saw its shares spike by 5.8% in after-hours trading on Wednesday. This surge came in response to the company’s sales forecast exceeding market expectations. As a package shipping company, FedEx managed to report earnings that remarkably outstripped anticipations, thanks to “ongoing cost reduction strategies” and gaining customers from competitors UPS (UPS) and Yellow (OTC:YELLQ).
Revenue Shortfall Amid Demand Weakness
Despite the positive news, FedEx’s revenue was reported at $21.7 billion, falling slightly below estimates due to persistently weak demand. According to CEO Raj Subramaniam, market disruptions were primarily caused by labor negotiations at FedEx’s main competitor and the bankruptcy of Yellow.
CEO Raj Subramaniam further explained FedEx’s strategic direction, indicating the firm’s intention to retain the majority of the newly acquired customers. He credited the increased business to “upheavals experienced by its competitors”.
Impact on FedEx Express
Despite these positive developments, FedEx Express, one of the company’s key service areas, continues to display signs of weakening. Nevertheless, the cost-cutting measures employed by FedEx have helped to boost operating profit within this division, presenting a silver lining amidst concerns over its performance.