FedEx to Announce Q1 Earnings: Analysts Expect Profit Growth

Q1 Earnings Expectations FedEx (NYSE:FDX) is set to report its fiscal 2025 first-quarter earnings after the market closes this Thursday, September 19.

Analysts are forecasting solid year-over-year revenue and profit growth for the shipping giant. According to Visible Alpha, analysts expect FedEx to report net income of $1.16 billion on revenue of $21.96 billion. This would mark a slight increase from $1.08 billion in net income and $21.68 billion in revenue in the same quarter last year.

Market sentiment towards FedEx remains positive. According to Visible Alpha, the stock holds 11 "buy" ratings, along with one "hold" and one "sell" rating. The consensus price target for FedEx is $323.50, which is about 13% higher than last Friday's closing price of $286.38.

Fiscal 2025 Outlook: A key area of focus for investors is FedEx's full-year outlook. In its previous earnings report in June, the company projected low- to mid-single-digit revenue growth for fiscal 2025. Analysts are estimating a modest 2% growth from the $87.69 billion earned last year. FedEx's earnings per share (EPS) are expected to land between $18.25 and $20.25, a notable improvement from the $17.21 EPS of fiscal 2024. Analysts expect FedEx to hit an EPS of $19.87.

Impact of USPS Contract Loss Later this month, FedEx will lose a key revenue stream as its contract with the U.S. Postal Service (USPS) expires. UPS will take over as USPS’ air freight carrier. FedEx previously stated that it could not reach "mutually agreeable terms" with the USPS, and has plans to adjust its shipping network to mitigate the impact of lost volume. Despite this, FedEx remains focused on boosting profitability.

Cost-Cutting Measures Pay Off In April 2023, FedEx unveiled a cost-cutting plan aiming to save $4 billion by 2025. This strategy has proven successful, helping the company improve profits even as revenues have declined. Last quarter, FedEx increased its cost-cutting goal for fiscal 2025 to $2.2 billion, up from $1.8 billion in fiscal 2024.

Despite weaker demand post-pandemic, FedEx is optimistic. Chief Customer Officer Brie Carere noted in June that the company expects shipping demand to improve throughout the year.