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FedEx stock jumps on earnings beat, $5B share buyback

FedEx (FDX) posted better-than-expected third-quarter earnings. Adjusted earnings per share of $3.86 per share topped the Street estimate of $3.46. Revenue of $21.7 billion was just shy of the $22.05 billion estimate. The postal courier and cargo operator's stock is seeing a boost in Thursday's after-hours trading. FedEx's board has approved a new $5 billion share buyback program.

Yahoo Finance Live reports on the earnings data, FedEx's shipping volume figures, and results of cost-cutting strategies.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

JULIE HYMAN: All right, we've got FedEx numbers that are out as well at the moment here. That company coming out with a forecast. That is it looks like it is narrowing its forecast.


Fiscal full-year earnings per share at 17:25 to 18.25. It had seen $17 to $18.50 here. So a bringing up on the low end, but bringing down on the upper end.

It's also announcing a new buyback program of $5 billion here. And the company says for the full-year, it will see a decline in revenue in the low single digit range here. So I'm focusing all on the forecast.

But, of course, the company also reported its third quarter numbers which beat-- earnings per share beating by $0.40. It looks like revenue coming in a little bit shy of what analysts had been anticipating here.

And coming in at $21.7 billion, analysts have been anticipating 22.05 billion. But it looks like between the buyback and the sort of narrowing of the forecast, but not getting substantially worse, I guess, that the stock is rising at first blush here.

JOSH LIPTON: Yeah, I mean, expectations were fairly muted, Julie, heading into that. It was only up about 4% this year. I know it's interesting.

I mean, folks do look at FedEx as a kind of barometer for the overall economy, specifically the shipping volumes number. There were kind of interesting questions about weather and winter weather how that might impact results. Because remember, there were those service disruptions in January.

So there were questions about the impact that would have on revenue and costs. So I'll be interesting on the call to see what execs have to say about that. Other topics, I updates on the company's cost cutting program. That's in focus for investors in this name.

And also its contract with the United States Postal Service. That is due to expire in September. So they'll get questions about that as well.

JULIE HYMAN: Yeah, the company also saying, by the way, that cost per package was flat here, and that operating results did improve due to Lewis structure costs, which is interesting. Raj Subramanian, the president and CEO saying in this statement pointing out highlighting two consecutive quarters of operating income growth and margin expansion even with lower revenue. He points to that as what he calls clear evidence of the progress we're making on our transformation as we navigate an uncertain demand environment i.e., the cost cutting that you were referring to.