FedEx earnings, Nike warning, Apple lawsuit – what’s moving markets

FedEx (NYSE: FDX) shares surged in premarket trading following the shipping giant’s report of better-than-expected fiscal 2024 third-quarter earnings, despite acknowledging economic uncertainty. At 05:05 ET (09:05 GMT), FedEx shares saw a 12% increase premarket.

For the quarter, FedEx reported an adjusted profit of $966 million, or $3.86 per share, surpassing expectations, with quarterly revenue totaling $21.7 billion, slightly down from $22.2 billion the previous year. The company also adjusted its fiscal 2024 profit forecast, raising the lower end while reducing the upper end. Additionally, FedEx announced plans to repurchase $500 million worth of shares in the current quarter, alongside a new $5 billion share repurchase program.

There was positive news from FedEx’s struggling Express overnight delivery unit, which saw its operating margin rise from 1.2% to 2.5% compared to a year ago. The unit, FedEx’s largest, had faced challenges with declining volumes due to its main customer, the U.S. Postal Service, favoring more cost-effective ground services over higher-margin air services.

FedEx disclosed ongoing negotiations for a new multi-year contract agreement with the USPS, as the current contract is set to expire at the end of September. However, the company expressed caution regarding the future, anticipating revenue pressure due to volatile macroeconomic conditions affecting customer demand and constraining yield growth.

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