FedEx retires one-fifth of Boeing 757 freighter fleet
FedEx retires 22 Boeing 757-200 freighters due to reduced demand, taking a $157 million charge. Q4 earnings surpass expectations, with revenue up 1%. FedEx shifts focus to cost containment, evaluating options for its Freight division. Despite challenges, FedEx anticipates revenue growth and plans for network efficiency.
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FedEx has retired 22 Boeing 757-200 freighter aircraft to align its air fleet with reduced parcel demand, resulting in a $157 million impairment charge. The company's fourth-quarter earnings exceeded expectations, with adjusted operating income up 5.6% and revenue up 1%. FedEx will no longer be the primary air cargo provider for the U.S. Postal Service, impacting operating income by $500 million this fiscal year. The company is focusing on cost containment and achieved $1.8 billion in savings last year. FedEx is evaluating options for its Freight division, including a potential spin-off. Despite challenges in the air cargo market, FedEx Ground and Freight units saw improved operating results. The company's fiscal year 2025 guidance anticipates low-to-mid-single-digit revenue growth and adjusted earnings per share of $20 to $22. FedEx's stock price rose 14% in aftermarket trading following the positive earnings report and outlook. FedEx is adapting its network for efficiency and cost savings, with a focus on transforming its operations for continued success in the evolving market landscape.
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