FedEx (FDX) earnings in the second quarter of 2023

fedex On Tuesday, it said its quarterly profit and sales were down from a year ago and warned of continued weak demand, but said “aggressive” cost-cutting measures were softening the blow.

The package delivery giant’s net income fell to $788 million in the three months ended Nov. 30, down from $1.04 billion a year earlier. Sales fell to $22.8 billion in that period, down from $23.5 billion in the previous year, which was lower than estimates.

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When adjusting for one-time items, FedEx posted earnings per share of $3.18, ahead of analyst estimates but well below the $4.83 per share it reported during the same period last year.

Here’s how FedEx performed in the second quarter of fiscal 2023, compared to Refinitiv consensus estimates:

• Earnings per share: $3.18 adjusted vs. $2.82 expected
• Revenues: 22.8 billion dollars, compared to the expected 23.74 billion dollars

The company reported a particular weakness in its Express unit, where operating income in that segment was down 64% from a year ago. FedEx Ground operating income was up 24% year-over-year, and FedEx Freight operating income was up 32% year-over-year. All three units have been supported by increased yields.

In September, FedEx announced cost-cutting measures that included grounding planes and closing some offices. also raised Parcel delivery rates. The company at the time withdrew its guidance, and CEO Raj Subramaniam warned that the economy would enter a “global recession”.

FedEx said Tuesday that it will be able to cut another $1 billion beyond what it projected in September, bringing total fiscal savings for 2023 to $3.7 billion compared to its plan earlier this year.

“Our teams are unwaveringly focused on executing cost savings to improve profitability,” FedEx Chief Financial Officer Michael Lenz said in the earnings release. “As we look forward to the second half of our fiscal year, we are accelerating our progress on cost actions, which is helping to offset continued global volume weakness.”

FedEx forecast full-year earnings per share of $13 to $14, lower than analyst expectations of $14.08 per share.

Shares of the company are down about 36% for the year as of Tuesday’s close, compared to the S&P 500’s drop of nearly 20%.

FedEx executives will hold a call with analysts to discuss results at 5:30 PM ET. They are likely to face questions about the global economy, the demand and reliability of holiday travel, and its costs for the coming year.