FedEx Corp.’s (NYSE: FDX) fiscal 2024 first-quarter results showed year-on-year bottom-line improvement despite continued demand weakness that hit its revenue.
Adjusted diluted earnings per share came in at $4.55, well above the $3.44-per-share figure in fiscal 2023’s first quarter and the $3.73-per-share consensus. Adjusted operating income rose to $1.59 billion from $1.23 billion, and net income increased to $1.16 billion from $905 million. Operating margin expanded to 7.3% from 5.3%.
However, revenue fell to $21.7 billion from $23.2 billion, a reflection of ongoing demand sluggishness. Reinforcing that, the company forecast flat year-over-year revenue growth for fiscal 2024, a change from the prior forecast of flat to low-single-digit growth for the full year.
FedEx Ground, the company’s U.S. ground delivery unit, was the top performer in the quarter. It posted a 59% increase in operating income and a 13% operating margin. The unit was buttressed by yield improvement and cost reductions, with cost per package declining more than 2% due to improved productivity and lower line-haul expense.
FedEx Express, the company’s air and international unit, and its largest, posted an 18% gain in operating income, with a 2% operating margin. Operating cost reductions, which included flight frequency reductions and the parking of freighter aircraft, more than offset a 9% year-on-year revenue decline, FedEx said.
Shares popped more than 5% in after-hours trading Thursday after rising fractionally during the regular session.