FedEx Rises on Plans to Consolidate Business
FedEx Corporation (FDX:US) announced major changes on Wednesday that will see FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies merged into the one company - Federal Express Corporation.
The full restructuring process is expected to be completed next June as the company aims to become a more leaner, streamlined business. FedEx projects it will save up to $4 billion by the end of 2025 as it implements restructuring changes.
Raj Subramaniam, who became the CEO last March, will continue to serve as President and CEO of the combined company.
“Over the last 50 years, we built networks that have created a differentiated and unmatched portfolio of services,” said Subramaniam, president and CEO, FedEx Corporation.
“This organizational evolution reflects how we represent ourselves in the marketplace – focused on flexibility, efficiency, and intelligence.”
Moreover, the package delivery company announced the Board has approved a request to increase the quarterly dividend by 10% to $5.04 for the fiscal 2024.
The changes were announced during the ‘DRIVE’ investor event held in New York on Wednesday.
These positive updates, as well as the most recent earnings report, have helped FedEx shares to trade higher recently. Moreover, the run-up in stock has played into the hands of investors like Congress member Michael McCaul, who reported several transactions involving FDX shares in recent months.
Most recently, the Congressman invested several hundreds of thousands of dollars in FedEx at levels nearly 10-25% lower relative to current market prices.
FedEx stock closed at $229.93 on Wednesday.
