FedEx announces Q2 financial results with strategic focus on operational transformation

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John Dietrich FedEx Executive Leadership Executive Vice President and CFO | FedEx

By Sky Industry News

Dec 19, 2024

FedEx Corporation has announced its financial results for the second quarter of fiscal 2025, ending November 30. The company reported a diluted earnings per share (EPS) of $3.03 on a GAAP basis and an adjusted diluted EPS of $4.05. Revenue for the quarter stood at $22 billion, unchanged from the previous year.

The company's president and CEO, Raj Subramaniam, stated, "Our second quarter results demonstrate that our efforts to transform our operations are working. The Federal Express segment delivered operating profit growth despite several headwinds, including the continued weak U.S. domestic demand environment as well as the expiration of our U.S. Postal Service contract."

The Federal Express segment showed improved adjusted operating results due to cost reduction benefits from the DRIVE program, higher base yield, and increased international export volume. However, these were partially offset by higher wage rates and transportation costs.

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Meanwhile, FedEx Freight experienced a decline in operating results due to fewer shipments and lower fuel surcharges but was partially balanced by higher base yield.

During this period, FedEx completed $1 billion in share repurchases which contributed $0.07 per diluted share to the quarterly results. The company plans to buy back an additional $500 million worth of stock during fiscal 2025.

FedEx's Board has decided on a full separation of FedEx Freight into a new publicly traded company within 18 months.

Looking ahead, FedEx is unable to provide specific fiscal 2025 EPS or effective tax rate forecasts on a GAAP basis due to uncertainties related to mark-to-market retirement plan accounting adjustments. However, they expect flat revenue year over year and adjusted EPS ranging from $19.00 to $20.00 per share after excluding business optimization costs.

John Dietrich, executive vice president and CFO of FedEx Corp., commented on their strategy: “I remain confident FedEx will continue to grow earnings this year despite the challenging demand environment.”

FedEx remains committed to achieving carbon-neutral operations by 2040 and continues its efforts towards operational efficiency through various initiatives such as network optimization and facility modernization.

For more detailed information regarding their financial performance and future outlooks, interested parties are encouraged to visit investors.fedex.com.