The share prices for FedEx have experienced a significant push in the recent trading session.
The share price surge is due to the high anticipation the investors have in the upcoming earnings report from the delivery company. The earnings report from FedEx is to be released in the upcoming days.
The investors are already very excited about the earnings report to come out as the company is expected to announce several changes to its business model.
Expectations Shared by the Analysts
According to the analysts, the company is expected to post earnings of $2.83 per share for the second quarter. On the other hand, analysts expect that the revenue for the company is going to remain flat.
As per the analysts, the company’s revenue is going to be somewhat similar to what had been achieved in the same quarter from the last year. In Q2 of 2021, FedEx generated revenue worth $23.74 billion.
It was in the month of September when the officials at FedEx shared the forecast for the full-year earnings. They had to do it as a result of an update that was not scheduled at all.
While sharing the information, the teams revealed that the earnings in the first quarter were $3.44 per share. This showed that compared to the same quarter of the last year, these earnings were down by 21%.
Even the consensus shared by the analysts at Wall Street was much higher than the company’s actual performance. In the first quarter, Wall Street analysts had set the earnings forecast to $5.14 per share.
The revenues that the company generated in the first quarter of 2022 were $23.2 billion.
Efforts by Raj Subramaniam
Raj Subramaniam, the chief executive officer at FedEx, who had taken the place of Fred Smith, talked about setting things right for the expansion of their business.
He stated that his efforts will revolve around the reduction of costs that the company is currently paying. He will aggressively accelerate these efforts to make sure that FedEx saves up a lot when it comes to costs.
As per Raj Subramaniam, the entire world is faced with global headwinds that are getting worse with every passing day.
Therefore, it is important they get ready to face these headwinds with all their might and in the most prepared manner possible.
While speaking with the analyst and shareholders back in September 2022, Subramaniam highlighted that their focus would be to cut costs.
He revealed that the total cuts they will be aiming for the entire world total to $2.7 billion. He revealed that for the second quarter alone, they were trying to cut costs by $700 million.
Subramaniam revealed that the major departments they chose to reduce the costs were the flights for the FedEx Express. He revealed that they are aiming to park as many planes as possible to reduce costs.
In addition to the above, the company also proceeded with the closure of so of the sorting warehouses that were located in domestic jurisdictions.
The company also cut back on the deliveries they processed on Sundays. By doing this, the company is confident that it will be able to reduce its costs on a large scale.
Subramaniam even talked about the employees that have been absent from the US freight division. The series was released by the CEO back in November for the furloughed employees.
The executive and his teams, are analyzing the entire situation and want to assess the business, and the environment to see what they are going to do.
They have a plan for the furloughed employees but they intend to do it only when the business circumstances and stance allow them.
Following the announcement, the share prices for FedEx edged higher by 0.13%. At the time of writing, FedEx’s shares are trading at a high of $169 per share.