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FedEx launches massive cost cuts after earnings announcement

FedEx launches massive cost cuts after earnings announcement
FedEx launches massive cost cuts after earnings announcement

After closing time on Wall Street on Thursday, FedEx presented an adjusted result per share of $3.44 in the first quarter of 2023 of its deviating fiscal year. This is in line with preliminary figures that were presented at the same time as a result announcement last week.

“Result announcements don’t get bigger than this,” wrote Finansavisen’s stock commentator Karl Johan Molnes.

Wall Street shared this view, sending the stock down more than 21 percent on the day the earnings announcement came out.

Cuts over 4 billion

In Thursday’s report, FedEx presented a cost-saving program of 4 billion dollars until 2025, i.e. close to 42 billion Norwegian kroner.

“In order to adapt costs to demand in the financial year 2023, due to a weaker than expected business climate, the company will prioritize reducing costs quickly,” the company writes.

During the current fiscal year, FedEx expects to cut costs by $2.2-2.7 billion, and among the savings, fewer flights and grounded flights are estimated to save $1.5-1.7 billion.

Maintains forecast

FedEx maintains its forecast for the second quarter, i.e. revenue of 23.5-24 billion dollars and an adjusted profit as of share of $2.75 or higher.

According to S&P Global Market Intelligence, the consensus pointed to 23.8 billion dollars in revenue and a result per share at $2.80.

The article is in Norwegian

Tags: FedEx launches massive cost cuts earnings announcement

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