Net profit in the fourth quarter fell by 30%! FedEx announced the grounding of 18 cargo planes!

It is learned that according to foreign media reports, FedEX reported on Tuesday that its express, land transportation and freight business volumes all declined in the quarter ending May 31 due to continued weak demand.

According to the financial report, FedEx's revenue in the fourth quarter was $21.9 billion, lower than the market expectation of $22.65 billion and $24.4 billion in the same period last year. It is worth noting that the company's revenue has declined for the third consecutive quarter. In addition, FedEx's adjusted net profit in the fourth quarter was $1.25 billion, a year-on-year decrease of 30%. Earnings per share were $4.94, a year-on-year decrease of 28%, but higher than the market expectation of $485 million.

According to the press release, FedEx is working to improve operating margins in the fourth quarter of fiscal 2023 by managing expenses by reducing flying time, grounding aircraft, closing facilities, and cutting headcount and hours.

Looking ahead, FedEx expects revenue to be flat or grow in the low single digits year-over-year in fiscal 2024 as it continues to take cost-cutting and efficiency-enhancing measures.

“We will maintain our focus on improving profitability and strive to achieve our fiscal 2024 goals to position the company for success in what remains a challenging demand environment,” Michael C. Lenz, FedEx executive vice president and chief financial officer, said in the release.

The company also announced that its chief financial officer, Michael Lenz, will retire at the end of July and become a senior consultant until the end of the year, and the company is looking for a new candidate from outside.

FedEx will ground 29 cargo planes in fiscal 2024 due to continued low demand, the report said. In addition, the company will merge its express and ground services in Canada. Starting in April next year, ground operations and employees will be moved to FedEx's express business unit. The company expects the integration of the two businesses to take several years.

It is learned that in the last fiscal year, FedEx cut 29,000 jobs, retired 18 aircraft, closed some offices, and reduced Sunday delivery services that affected profits. The company hopes to cut $4 billion in permanent costs by the end of fiscal 2025.

Editor ✎ Nicole/

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