FedEx Stock Surges on Plans To Spin Off Freight Business
FedEx (FDX) shares rose in after-hours trading Thursday after the shipping giant announced its plans spin off Its freight business operates as a separate company.
The shipping giant said the process of separating its cargo operations would begin immediately and could be completed within the next 18 months.
Ahead of the announcement, Citi analysts said last week Spin-off of the freight business into a separate company could “unlock value” in the business, but suggested the move may not be the best option in the long term.
FedEx reported second-quarter revenue of $22 billion, down from $22.17 billion in the same period last year and below analysts’ expectations of $22.14 billion. profit It also fell to $741 million from $900 million a year ago, below analysts’ forecasts.
After adjusting for “business optimization costs” of $249 million, FedEx reported adjusted net income of $990 million, better than analysts’ expectations of $976.6 million.
After the report was released, FedEx shares rose about 8% in after-hours trading. Shares of 2024 were up about 9% as of Thursday’s close.