FedEx Corp (FDX) delivered a mixed bag of results for its first quarter of fiscal 2025, falling short of analysts’ expectations on both revenue and earnings. The company reported first-quarter revenue of $21.6 billion, missing estimates of $21.955 billion, according to Benzinga Pro. Adjusted earnings per share also came in below projections, clocking in at $3.60 versus analyst estimates of $4.80 per share.
The company attributed the disappointing performance to a shift in demand, with customers opting for lower-priced, deferred services instead of higher-priority options. This trend, coupled with elevated operating expenses and a reduced number of operating days in the quarter, further dampened results.
Specifically, Federal Express saw a decline in U.S. domestic priority package volume, while increased wage and transportation costs added to the pressure. FedEx Freight also experienced a downturn, marked by a decrease in weight per shipment and fewer priority shipments.
Despite the lackluster performance, FedEx maintained its commitment to shareholder value, completing a $1 billion accelerated buyback during the quarter and projecting an additional $1.5 billion repurchase in fiscal 2025. As of August 31st, the company still had $4.1 billion remaining in its buyback program and held $5.9 billion in cash on hand.
Addressing the challenges, Raj Subramaniam, President and CEO of FedEx, expressed confidence in the company’s long-term prospects: “Despite a challenging quarter, we remain focused on transforming our network, improving our efficiency, lowering our cost-to-serve, and enhancing our ability to adapt with speed to evolving market dynamics. Overall, I remain confident in the value-creation opportunities ahead as we focus on reducing our structural cost, growing revenue profitably, and leveraging the insights from our vast collection of data as we continue to build the world’s most flexible, efficient and intelligent network.”
Looking ahead, FedEx revised its full-year 2025 outlook downward. The company now anticipates revenue growth in the low single-digit range, a downgrade from its previous projection of low-to-mid single-digit growth. Earnings per share are also expected to be lower, with the company forecasting a range of $17.90 to $18.90 per share, down from its previous range of $18.25 to $20.25 per share.
FedEx will hold a conference call at 5:30 p.m. ET to further discuss the quarterly results and provide additional insights into the company’s future plans.
In after-hours trading on Thursday, FedEx shares plunged 8.94%, closing at $273.55, reflecting investor concerns about the company’s near-term prospects.
