FedEx Corporation reported its financial results for the three-month period ending August 31, 2024, revealing a slight decline in revenue and profitability compared to the same period in the previous year. Total revenue for the quarter was $21,579 million, down from $21,681 million in 2023. The decrease in revenue was attributed to one fewer operating day and reduced demand surcharges, particularly in the Federal Express segment, which saw a 1% decline in revenue to $18,305 million. FedEx Freight also experienced a 2% drop in revenue, totaling $2,329 million.
Operating income for the quarter fell significantly to $1,080 million, a 27% decrease from $1,485 million in the prior year. This decline was influenced by increased operating expenses, which rose to $20,499 million, representing 95% of revenue, compared to 93.2% in the previous year. The operating margin decreased to 5.0% from 6.8% in 2023. Net income for the quarter was $794 million, down 26% from $1,078 million in the same period last year, resulting in diluted earnings per share of $3.21, compared to $4.23 in 2023.
The company’s cash and cash equivalents decreased to $5,943 million from $6,501 million at the end of May 2024. Cash provided by operating activities also fell sharply to $1,187 million, down from $2,230 million in the previous year. The net decrease in cash and cash equivalents for the quarter was $(558) million, contrasting with an increase of $199 million in 2023.
Strategically, FedEx underwent a significant consolidation on June 1, 2024, merging FedEx Ground and FedEx Services into Federal Express, aimed at creating a unified air-ground express network. Additionally, the company announced a workforce reduction plan in Europe, affecting 1,700 to 2,000 employees, with expected pre-tax costs between $250 million and $375 million classified as business optimization expenses.
Capital expenditures for the quarter totaled $767 million, a 41% decrease from $1,290 million in the same period last year, reflecting reduced spending on aircraft and related equipment. The company also completed accelerated share repurchase transactions totaling $1 billion during the quarter, with $4.1 billion remaining available for stock repurchases under the 2024 program.
Overall, FedEx's performance in the first quarter of fiscal year 2025 reflects challenges in the macroeconomic environment, including declining U.S. imports and global industrial production, which have negatively impacted shipment volumes and yields across its segments.
About FEDEX CORP
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