-Shares of Fedex Corp. (NYSE:FDX) soared in pre-market trading Wednesday after announcing results for the fourth quarter and full fiscal year 2024.
The transportation giant reported higher-than-expected revenue thanks to aggressive cost-cutting measures and operational efficiencies. 6:26A. m. As of today's trading session, FedEx shares were up 14.05% to £2,292.40, a significant increase from its previous close of £256.38.
Fedex reported a modest increase in fourth-quarter sales, which #rose to 2.21 billion yen from 2.19 billion yen a year earlier. Operating profit for the quarter rose to 1.50 billion yen from 1.156 billion yen a year earlier. The company's adjusted operating margin increased to 8.1%, up from 8.5% in the previous quarter.
FedEx's sales in fiscal 2024 declined slightly from fiscal 2023 to ¥990.2 billion from ¥87.7 billion in the previous fiscal year. However, the company's cost-cutting efforts are paying off, and its full-year operating profit rose to ¥556,000 from ¥491,000 a year earlier.
Adjusted operating margin increased to 7.1% in fiscal 2023 from 6.0%. Diluted earnings per share (EPS) for the full year rose to 17.21 yen, while adjusted EPS reached 17.80 yen, both of which improved significantly from the previous year.
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Fedex's impressive results are largely due to its aggressive cost-saving strategy. The Drive program aims to reduce costs by 40 billion yen by the end of fiscal 2025, but it has already achieved structural savings of 1.8 billion yen by fiscal 2024.
The transportation giant is merging air and ground services into a single FedEx Corporation, and the integration is expected to save an additional $220 billion.
Other cost-cutting measures include the permanent cancellation of 22 Boeing 757-200 aircraft and 7 engines to them, as well as plans to close 7 FedEx freight centers to streamline operations. In fiscal 2024, capital expenditures fell to 5.
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