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FedEx shares surge after parcel giant tospinoff freight division

admin by admin
December 19, 2024
in Business
0
FedEx shares surge after parcel giant tospinoff freight division

Investing.com — FedEx Corporation (NYSE:FDX) shares soared more than 9% at $299.5 in extended trading after the company announced plans to spin off its less-than-truckload freight division.

FedEx intends to carry out the spinoff through a capital markets transaction, creating two independent, industry-leading public companies.

As two industry-leading public companies, FedEx and FedEx Freight will continue to pursue their growth strategies, the company added.

“This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,” said CEO Raj Subramaniam. 

The company stated the separation is expected to be executed in a tax-efficient manner for FedEx stockholders and completed within the next 18 months.

The parcel delivery giant reported second-quarter earnings of $4.05 per share, matching Wall Street estimates, and up slightly from $3.99 per share a year ago.

However, revenue for the quarter totalled $22 billion, falling short of the consensus estimate of $22.17 billion.

FedEx provided guidance for fiscal 2025 adjusted earnings per share in the range of $19.00 to $20.00, compared with the analyst consensus of $19.75.

The Memphis-based delivery company has been going through a complex restructuring, which involves aggressive cost cutting. It said the permanent cost reductions from the DRIVE transformation program was of $2.2 billion. 

Shares of rival UPS were also up more than 1%. 

This post appeared first on investing.com
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