On Tuesday, FedEx announced its fiscal fourth-quarter earnings, reporting adjusted earnings per share of $6.31, surpassing the expected $5.96, and revenue of $25.01 billion, exceeding the forecast of $24.04 billion.
This quarter is notable as it is the last to include the freight business, which was spun off into a separate entity, FedEx Freight, on June 1, resulting in a cash dividend of approximately $4.1 billion to FedEx Corporation. Despite the strong earnings, FedEx shares fell about 4% in after-hours trading.
The company reported a net income of $1.6 billion, or $6.60 per share, down slightly from $1.65 billion, or $6.88 per share, in the same quarter last year. FedEx Express revenue reached $21.57 billion, beating estimates of $20.75 billion, with a 3% year-over-year increase in domestic and U.S. priority volumes.
CEO Raj Subramaniam emphasized the effectiveness of their growth strategy and the successful spin-off, which positions the company for future growth while optimizing costs and enhancing free cash flow.
Additionally, FedEx announced a change in its fiscal year-end from May 31 to December 31 and projected an 11% revenue growth for the upcoming year, with adjusted diluted earnings per share expected between $16.90 and $18.10. However, the company faced a significant increase in fuel costs, rising from $864 million to $1.43 billion, a 66% increase, alongside a 10% rise in U.S. pricing