FedEx profit tops estimates as higher prices offset decline in shipments

FedEx Corp. reported fiscal second-quarter earnings that beat analysts’ estimates, lifted by price increases and cost cuts that helped make up for a decline in package volume. Shares of the delivery giant rose after the company announced an additional $1b of projected savings in fiscal 2023, bringing the total to about $3.7b. The stock gained 3.6% to $170.25 in extended trading. It has dropped 36% this year. Earnings totaled $3.18 a share excluding some items, the Memphis, Tennessee-based courier said Tuesday in a statement. Analysts had predicted $2.80 a share on average. Sales for the quarter ended Nov. 30 were $22.8b, below estimates of $23.7b. FedEx is making “rapid progress on our ongoing transformation while navigating a weaker demand environment,” CEO Raj Subramaniam said. “Our earnings exceeded our expectations in the second quarter driven by the execution and acceleration of our aggressive cost reduction plans.” Investors had pared their expectations in September after FedEx pulled its annual forecast, posted earnings well below estimates and pledged to cut costs in the face of sagging volume. The decline in shipments was much quicker than FedEx anticipated, and the company also struggled with service issues in Europe, Subramaniam said on a Sept. 22 conference call.<br/>