Shares of FedEx Corp. (NYSE: FDX) were up in morning trading on Wednesday after the logistics giant announced a big dividend hike of 10% to $5.04 per share for FY24. The company’s Board of Directors also declared a quarterly cash dividend of $1.26 per share payable on July 3 to stockholders of record at the close of business on June 12.
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The company announced a consolidation of its delivery operations with a phased transition and implementation expected to be completed in June next year and will bring “FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies into Federal Express Corporation, becoming a single company operating a unified, fully integrated air-ground network under the respected FedEx brand.” FedEx Freight will continue to be a standalone company and provide less-than-truckload freight transportation services under FedEx.
FedEx also updated its cost savings target for its DRIVE Investor event that began at 8:30AM EST today and now has projected to generate $4 billion of cost savings in FY25. The company achieved $1.2 billion in cost savings year-over-year at the end of Q3 and expects to generate cost savings of $1 billion in accordance with the DRIVE plan. The company “continues to project costs of up to $2 billion by the end of fiscal 2025 to implement its business optimization initiatives including the DRIVE and Network 2.0 programs.”
Analysts are cautiously optimistic about FDX stock with a Moderate Buy consensus rating based on 14 Buys and nine Holds.
