Why FedEx Stock Is Popping Thursday Afternoon

FedEx Corp FDX shares are trading higher Thursday afternoon after the company reported fiscal first-quarter results that were better than feared following the company’s weak preliminary results from last week.

Q1 Results: FedEx reported first-quarter revenue of $23.2 billion, which missed average analyst estimates of $24.01 billion, according to Benzinga Pro. The company reported quarterly adjusted earnings of $3.44 per share, which beat average analyst estimates of $3.35 per share.

FedEx said its quarterly results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter due to weakening economic conditions.

“We’re moving with speed and agility to navigate a difficult operating environment, pulling cost, commercial, and capacity levers to adjust to the impacts of reduced demand,” said Raj Subramaniam, president, and CEO of FedEx.

FedEx expects fiscal second-quarter revenue to be between $23.5 billion and $24 billion versus the estimate of $24.05 billion. The company expects second-quarter adjusted earnings to be $2.75 per share or greater.

Strategic Update: To align fiscal 2023 costs with demand due to a weaker-than-expected business environment, FedEx is prioritizing actions to reduce costs quickly. The company expects to generate total cost savings between $2.2 billion and $2.7 billion for fiscal 2023. 

In the first quarter, FedEx said it realized approximately $300 million of savings. The company expects to realize approximately $700 million in savings in the second quarter.

FedEx also announced plans to repurchase $1.5 billion of its common stock during fiscal 2023. The company said it plans to repurchase $1 billion of its common stock in the second quarter.

See Also: What Does FedEx’s Earnings Miss Mean For Amazon? ‘Expect Some Share Gains’

FDX Price Action: FedEx has a 52-week high of $266.79 and a 52-week low of $153.25.

The stock was up 2.17% at $156.63 Thursday afternoon.

Photo: erikleenaars from Flickr.