FedEx Corp. (NYSE: FDX) late Tuesday posted fiscal 2023 fourth-quarter revenue of $21.9 billion, down from $24.4 billion in the year-earlier period. Adjusted diluted earnings per share came in at $4.94, down from $6.87 a share and above a $4.89-a-share estimate from Yahoo Finance.
Net income of $1.25 billion was down from $1.8 billion in the year-earlier period.
Operating margin of 8.1% was the strongest reported during the fiscal year due to the execution of expense management controls, the company said, adding that the results were affected by continued demand weakness and cost inflation pressures.
FedEx also announced that Executive Vice President and CFO Michael Lenz will retire on July 31. A search is underway for his successor. Lenz will stay on through the end of the year to ensure a smooth transition, the company said.
For fiscal 2024, which started June 1, FedEx expects flat to low-single-digit revenue growth and expects to wring $1.8 billion in permanent savings out of $4 billion in savings in this fiscal year and the next.
The company expects to see margin improvements at its Express and Ground units, while freight margins will remain under pressure for the year, especially in the first quarter.
“We plan for flattish, low-single-digit revenue growth all based on the economy,” said Brie Carere, chief customer officer at FedEx.
At FedEx Express, the company’s air and international unit, flight hours were down 12% in the quarter, which was greater than the volume decline.
Separately, FedEx does not plan to see any meaningful diversion of UPS Inc. customer packages during the on-going UPS labor talks wuth the Teamsters. Carere told analysts that it has having a “lot of great conversations” with UPS shippers about possible opportunities. However, that hasn’t translated into tangible benefits for the company.