FedEx Corp (NYSE:FDX, ETR:FDX) stock surged more than 10% after Thursday’s closing bell as the parcel delivery company’s fiscal third quarter profits topped estimates.
For the quarter ended February 29, 2024, FedEx posted adjusted diluted earnings per share of $3.86, up from $3.41 in the year-ago quarter and ahead of estimates of $3.49.
Revenue, however, fell short of expectations of $22 billion at $21.7 billion. This also represented a decline from $22.2 billion in the year-ago quarter.
The company attributed increased income and margin improvement despite lower revenue to the execution of its DRIVE cost-cutting and efficiency program and a focus on revenue quality.
"FedEx delivered another quarter of improved profitability in what remains a difficult demand environment, reflecting outstanding service and continued benefits from DRIVE," FedEx CEO Raj Subramanian said in a statement.
"We are making meaningful progress on our transformation, while strengthening our value proposition and improving the customer experience. I've never been more confident in our path ahead as we build a more flexible, efficient, and intelligent network."
Also buoying FedEx shares was its announcement that its board has authorized a $5 billion share buyback program on top of its already authorized program.
During 3Q, the company repurchased $1 billion in shares and said the year-to-date decrease in its outstanding shares benefited its quarterly results by $0.09 per diluted share.
It expects to repurchase an additional $500 million during 4Q, bringing its fiscal 2024 buyback total to $2.5 billion.
FedEx shares traded up 10.3% at $292 shortly after the release of its earnings report.