🔹 Adj EPS: $4.05 (Est. $4.02) 🟢
🔹 Revenue: $22.0B (Est. $22.15B) 🔴
🔹 Adj Operating Income: $1.38B (Est. $1.36B) 🟢
🔹 Adj Operating Margin: 6.3% (Est. 6.1%) 🟢
🔹 To spin off FedEX freight, creating two public companies 🟢
Segment Performance: FedEx Express
🔹 Revenue: $18.8B (Est. $18.80B) 🟡
🔹 Operating Income: $1.26B (Est. $1.11B) 🟢
🔹 Operating Margin: 6.7% (Est. 1.2%) 🟢
FedEx Freight
🔹 Revenue: $2.39B (Est. $2.39B) 🟡
🔹 Operating Income: $326M (Est. $440.5M) 🔴
🔹 Operating Margin: 13.7% (Est. 18.4%) 🔴
Shareholder Returns:
🔹 $1B in share repurchases completed during Q2.
🔹 Plan to repurchase an additional $500M in FY2025, totaling $2.5B in buybacks.
🔹 Cash on-hand: $5.0B as of November 30, 2024.
Lowers FY25 Guide:
🔹 Adjusted EPS: $19.00-$20.00 (Prev. $20.00-$21.00, Est. $19.75) 🔴
🔹 Revenue: Approximately flat YoY (Prev. Low single-digit growth).
🔹 Diluted EPS (before business optimization costs): $16.45-$17.45.
🔹 Capital Expenditures: $5.2B focused on network optimization, fleet modernization, and automation.
🔹 Effective Tax Rate (ETR): ~24.0% (Prev. 24.5%).
Operational Updates:
🔹 DRIVE Program: Cost reductions of $2.2B reaffirmed.
🔹 FedEx Freight:
- Decreased operating results due to weaker U.S. industrial demand, lower fuel surcharges, and fewer shipments.
🔹 FedEx Express:
- Improved results driven by cost reduction benefits from DRIVE and higher base yields, partially offset by U.S. domestic demand weakness and the expiration of the U.S. Postal Service contract.
Strategic Announcements:
🔸 FedEx announced its intent to separate FedEx Freight, creating a new publicly traded LTL company.
🔸 The separation will be executed within 18 months and in a tax-efficient manner.