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Aug 31, 2024
FedEx Q1 2025 Earnings Report
FedEx transitioned to One FedEx and reported a decrease in operating income due to mix shift and higher expenses, partially offset by DRIVE program savings.
Key Takeaways
FedEx reported Q1 2025 revenue of $21.6 billion and diluted EPS of $3.21. Results were impacted by a mix shift and higher operating expenses, offset by cost reductions from the DRIVE program. The company completed a $1 billion share repurchase during the quarter and narrowed its full-year earnings outlook.
Successfully transitioned to One FedEx at the start of fiscal 2025.
Completed a $1 billion share repurchase during the quarter.
First quarter results were negatively affected by a mix shift and higher operating expenses.
Revised fiscal 2025 revenue and earnings forecasts.
FedEx
FedEx
Forward Guidance
FedEx is revising its fiscal 2025 revenue and earnings forecasts and now expects a low single-digit percentage revenue growth rate year over year and earnings per diluted share of $17.90 to $18.90 before MTM adjustments.
Positive Outlook
- Permanent cost reductions from the DRIVE transformation program of $2.2 billion.
- ETR of approximately 24.5% prior to the MTM retirement plans accounting adjustments.
- Capital spending of $5.2 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation.
- Expects to help offset weaker-than-expected demand trends.
- Remain committed to our plan to return $3.8 billion to stockholders this fiscal year.
Challenges Ahead
- A low single-digit percentage revenue growth rate year over year, compared to the prior forecast of a low-to-mid single digit percentage increase.
- Earnings per diluted share of $17.90 to $18.90 before the MTM retirement plans accounting adjustments compared to the prior forecast of $18.25
- Unable to forecast the fiscal 2025 mark-to-market (MTM) retirement plans accounting adjustments.
- Relying on the exemption provided by the Securities and Exchange Commission (SEC).
- It is reasonably possible that the fiscal 2025 MTM retirement plans accounting adjustments could have a material effect on fiscal 2025 consolidated financial results and ETR.