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May 31, 2024
FedEx Q4 2024 Earnings Report
FedEx's Q4 2024 earnings reflected improved operating income and margin due to DRIVE program execution, despite a modest revenue increase.
Key Takeaways
FedEx Corp. reported a slight increase in revenue and improved operating income and margin for Q4 2024, driven by cost management through its DRIVE program. The company is conducting an assessment of the role of FedEx Freight in value-creation plans. They also returned $3.8 billion to stockholders through stock repurchases and dividends during fiscal 2024.
Q4 revenue increased modestly year-over-year.
Operating income and margin improved due to DRIVE program initiatives.
FedEx Freight plans to optimize operations by closing seven facilities.
FY25 outlook includes $2.2 billion in DRIVE cost savings and stock repurchases.
FedEx
FedEx
Forward Guidance
FedEx anticipates low-to-mid single-digit revenue growth and earnings per diluted share of $18.25 to $20.25 before MTM retirement plans accounting adjustments. The company expects $2.2 billion in permanent cost reductions from the DRIVE transformation program.
Positive Outlook
- Low-to-mid single-digit revenue growth year over year
- Earnings per diluted share of $18.25 to $20.25 before MTM retirement plans accounting adjustments
- Earnings per diluted share of $20.00 to $22.00 after also excluding costs related to business optimization initiatives
- Permanent cost reductions from the DRIVE transformation program of $2.2 billion
- Capital spending of $5.2 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation.
Challenges Ahead
- Unable to forecast the fiscal 2025 MTM retirement plans accounting adjustments.
- 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.
- These forecasts assume the company's current economic forecast and fuel price expectations, successful completion of the planned stock repurchases, and no additional adverse economic or geopolitical developments.
- FedEx’s ETR and earnings per share forecasts are based on current law and related regulations and guidance.
- The company is conducting an assessment of the role of FedEx Freight in the company’s portfolio structure and potential steps to further unlock sustainable shareholder value.