FedEx (NYSE:FDX)’s shares have clawed back lost ground after falling back sharply last September to two-year lows when it issued a surprise profit warning, CMC Markets analyst Michael Hewson said in a note to clients.
Shares of the Memphis, Tennessee-based company are now up 40% from that trough, he added.
In December, FedEx beat its lowered second-quarter expectations on profits, returning $3.18 in diluted adjusted earnings per share, although the company missed on revenues, which came in at $22.8 billion.
Hewson noted that the outperformance came about due to the company increasing its prices, as well as announcing widescale cost reductions back in September.
“FedEx also said it would be cutting another $1 billion in costs on top of the $2.7 billion it announced previously,” Hewson said. “FedEx also reinstated earnings guidance for the full year, announcing a new target of between $13 and $14 a share.”
The big jump in retail sales seen in the US economy at the start of this year augurs well for a decent number for 3Q, with profits expected to come in at $2.74 a share, Hewson said.
FedEx's shares were 3% down at $198.36 by 2:30pm ET in New York. They fell to around $143 on September 26, 2022.
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