FedEx shares rise as U.S. deliveries, cost cuts drive first-quarter results beat

Core Insights - FedEx shares rose by up to 2% following better-than-expected first-quarter results, driven by strong domestic deliveries and effective cost-cutting measures that mitigated a decline in international volumes [1][4] Financial Performance - Overall average daily volumes increased by 4% in the quarter, supported by strong summer holiday demand in the U.S., despite a 3% drop in international exports. Revenue per package also rose by 2% [2] - FedEx reported a 2.2% increase in adjusted profit for the quarter ending in August, contrary to analysts' expectations of a profit hit due to global trade headwinds [4] Strategic Initiatives - The company has implemented efficiency measures and tighter cost controls, including parking planes, closing facilities, and merging units, aiming to reduce costs by billions [2] - The end of the partnership with the U.S. Postal Service, which had negatively impacted earnings, is expected to improve profitability moving forward [3] Market Position - FedEx's profit forecast for fiscal 2026 was slightly below Wall Street estimates, but the issuance of this guidance was seen as a positive surprise given the company's recent challenges [5] - FedEx trades at 11.83 times projected 12-month forward earnings, slightly lower than UPS at 12.04, with both companies facing pressure from softening industrial demand and a shift to cheaper ground shipping [6]