FedEx Corp (NYSE:FDX) stock rallies 14.74% (As on June 26, 12:09:49 AM UTC-4, Source: Google Finance) after the company forecast profit above Wall Street’s expectations and said it would buy back $2.5 billion of its stock over the next year, lifting its shares on signs that a sweeping plan to reorganize and cut costs was taking hold. FedEx also hinted at a possible divestiture of its freight business, saying it’s assessing the unit’s place in the company’s portfolio. Operating results at FedEx Freight increased in the fourth quarter because of higher yield and effective cost management. Further, the company is in the process of consolidating the Express, Ground and Services units, a fundamental shift from the two-network system it has operated for decades. The Express segment has been particularly hard hit by slumping demand as inflation-stung customers opt to ship via ground instead of air.

FDX in the fourth quarter of FY 24 has reported the adjusted earnings per share of $5.41, beating the analysts’ estimates for the adjusted earnings per share of $5.34. The company had reported the adjusted revenue growth of 35.9 percent to $22.1 billion in the fourth quarter of FY 24, which is inline with the analysts’ estimates for revenue of $22.1 billion. The company’s Ground segment reported a 1.2% uptick in average daily volume year over year, in line with estimates, indicating a slowdown in the decline of parcel shipping. Strengthening demand could signal a return to more balanced consumer spending that shifted heavily toward services and away from goods in the wake of pandemic restrictions.

Adjusted earnings in the 2025 fiscal year will be $20 to $22 a share, the company. The midpoint topped the $20.85 average of analysts’ estimates compiled by Bloomberg. Revenue will grow in the low-to-mid single-digit percentage for the period. For fiscal 2025, FedEx expects to repurchase $2.5 billion of FedEx common stock, including $1.0 billion during the first fiscal quarter, and previously announced a 10% increase ($0.48 per share) in the annual dividend rate on its common stock to $5.52 per share. FedEx  expects $2.2 billion of permanent cost reductions in this fiscal year. The company has been working to reduce costs across the organization, including shrinking the workforce by tens of thousands of workers. The latest announcement came earlier this month when the company said it plans to reduce its headcount in Europe by as many as 2,000 jobs.