FedEx (FDX:US) shares rose on Thursday after the shipping company said it gained a new market share in the prior quarter, while recent cost-cutting actions helped it record strong profitability.
FedEx reported an increase in its full-year profit outlook as cost-cutting efforts and disruptions in the operations of some of its competitors contributed to better-than-expected quarterly results, despite ongoing challenges in the shipping industry.
“We started fiscal 2024 with strong momentum as our global transformation actions take hold and drive improved results,” said Raj Subramaniam, FedEx Corp. president and chief executive officer.
FedEx also mentioned that the company benefited from the negotiations between its rival, United Parcel Service Inc. (UPS:US), and the Teamsters union earlier in the year. Moreover, the bankruptcy filing of trucking firm Yellow Corp. (YELLQ:US) had a positive impact on FedEx's performance.
The company has increased its full-year profit outlook, expecting adjusted profit per share to range from $17.00 to $18.50 for the fiscal year, up from the previous forecast of $16.50 to $18.50. However, FedEx also anticipates "approximately flat" sales for the fiscal year, which is a change from earlier expectations of "flat to low-single-digit-percent" growth.
In the first quarter, FedEx reported net income of $1.08 billion, equivalent to $4.23 per share, compared to $875 million, or $3.33 per share, in the same quarter of the previous year. The company's revenue for the quarter declined to $21.7 billion from $23.2 billion in the previous quarter.
FDX shares closed at $261.88 on Thursday.