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Key Takeaways
- FedEx is set to report its latest quarterly earnings after the bell on Thursday following a tough stretch for the package delivery giant amid weakened demand.
- The company has worked to recover after a spike in demand for its services during the pandemic slowed in recent quarters.
- FedEx announced plans last year to restructure and cut an estimated $4 billion in costs by 2025.
FedEx (FDX) is set to report third-quarter earnings for its 2024 fiscal year after the bell on Thursday following a tough stretch for the package delivery giant amid weakened demand.
In December, FedEx had reported results for the second quarter that missed estimates as it faced “volatile macroeconomic conditions” and lowered its guidance for the second consecutive quarter, leading to a single-day drop of 12% in its stock price after releasing results.
For the third quarter, analysts expect FedEx to post revenue of $22.02 billion, in a decline from the prior quarter and year-ago period, according to estimates compiled by Visible Alpha. The company is anticipated to post net income of $879.5 million and diluted earnings per share (EPS) of $3.50, down from the prior quarter but up from the same period a year earlier.
During the company’s second-quarter earnings call in December, FedEx warned its revenue could “continue to be pressured” by conditions “negatively affecting customer demand for our services across our transportation companies.”
| Analyst Estimates for Q3 FY 2024 | Q2 FY 2024 | Q3 FY 2023 | |
| Revenue | $22.02 billion | $22.17 billion | $22.17 billion |
| Diluted EPS | $3.50 | $3.99 | $3.41 |
| Net Income | $879.5 million | $1.01 billion | $865 million |
Key Metric: Average Daily Volume
FedEx has reported nine straight quarters of year-over-year declines in average daily volume (ADV) of FedEx Express packages handled in the U.S. Another key metric to watch is revenue, as FedEx’s revenue and ADV soared to record highs during the pandemic but have been sinking or growing more slowly over the last several quarters.
The company has been working to adjust to a slowdown in revenue following the pandemic boom. In its second-quarter earnings report, FedEx adjusted its guidance for the rest of 2024, projecting full-year sales to fall by a low-single-digit percentage, rather than the flat growth it previously anticipated.
FedEx competitor United Parcel Service (UPS) has also struggled with declining shipping demand in recent quarters, as well as with integrating changes to its business related to the contract agreement it reached with the Teamsters union last summer, averting a strike by more than 300,000 UPS employees.
Business Spotlight: Restructuring Effort
FedEx has had a mixed year since announcing a plan in April 2023 to restructure and cut about $4 billion in costs by 2025.
The plan, set to be complete in June, includes bringing FedEx Ground, Express, and Services all under the Federal Express Corp. umbrella, while still operating FedEx Freight as a separate business. Investors will likely be looking for updates on how that process is going, and what the long-term impacts could be.
A reduction in the company’s headcount of about 25,000 employees worldwide was also part of the cost-cutting effort.
FedEx shares were up 0.4% year to date as of Friday’s close, and have gained about 24% over the past 12 months.