FedEx Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Imbro - Stephens Inc. - Analyst : Hey, good afternoon, everybody. Thanks for your question. And maybe I will ask on the Express side. So margins obviously came in at two six for the year. I think obviously it's been volatile, but with the cost progress in Europe, the USPS contract shift? And then just other moving factors in the core business, can you talk about how you expect those margins to trend both in the near term. And then as we move through fiscal 25, Roger, give a little bit of color, I think on some of the USPS headwinds and timing. But any more detail there and quantifying that would be helpful. Thanks.

Question: Scott Group - Wolfe Research, LLC - Analyst : Hey, thanks, afternoon. So on in the bridge, the $500 million postal headwind for the year. How much of that is in Q2? And what do you think that should mean for sort of like the quarterly earnings cadence? And I guess ultimately, how much of the revenue decline with the Post Office do you think you can fully offset over the next few quarters? And then if I if I may just a separate topic, Raj, just can you just talk about like the puts and takes of why you would or wouldn't go ahead with that yet with an LTL spin? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 9:00PM, FDX.N - Q4 2024 FedEx Corp Earnings Call

Question: Chris Wetherbee - Wells Fargo Securities, LLC - Analyst : Hey, thanks. On maybe Kevin, just to follow up again on the LTL piece Raj, just wanted to get a sense, does this include a spin or sale of the assets? I want to make sure we understand all opportunities are public potential is on the table. And then I guess, John, maybe you are thinking about that kind of revenue cadence. I guess, how do you how do you think that sort of plays? I guess that's the piece I'm looking at as the first step in the bridge on the revenue side, how that sort of plays out. Obviously, you have the big dip in revenue relative to USTS. starting in 2Q. Just wanted to get a sense of kind of how to think about that over the course of the year. Unidentified Participant Okay.

Question: Conor Cunningham - Melius Research LLC - Analyst : Thank you.

Question: Ken Hoexter - BofA Global Research (US) - Analyst : Great. Thank you. Good afternoon. So, Rod, a lot to digest here and thanks for all the detail. Maybe just thoughts on the integration of the networks. Are your early take on how that's proceeding? And I don't know if it's for you or John or Brie, but your 20 $22 range, maybe thoughts on what's the upside downside within that range from the midpoint? Unidentified Participant Thanks.

Question: Brandon Oglenski - Barclays Capital Inc. - Analyst : Hi, good afternoon. And maybe if I can just follow-up from Ken's question there, Raj, on network 2.0 and the integration, I think investors are pretty excited about this, but also concerns. But there could be network disruption. I mean, if we've just looked across 20 or 30 years of transportation network integration, that always hasn't gone all that well, we can look no further than TI and TI. So what are you guys doing from a systems perspective and maybe like a physical network and facility pickup and delivery line haul perspective that mitigates some of those risks? And what are the lessons learned thus far?

Question: Tom Wadewitz - UBS Securities LLC - Analyst : Yes, good morning. So or good morning, good afternoon. Days gone by quickly, um, let's see. I wanted to see if you could give I know you talked a little bit about the some of the factors in drive wanted to see if you could give a little bit more maybe on Europe, I think some of the cost savings you announced, the headcount reductions come a couple of years out, not not in fiscal 25 or the ramp in 26 and more so in 27, can you give just a little more perspective on the changes in Europe and just how important the $600 million improvement in Europe is to the overall drive? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 9:00PM, FDX.N - Q4 2024 FedEx Corp Earnings Call

Question: Jon Chappell - Evercore Group L.L.C. - Analyst : Thank you. Good afternoon. I'm John, you pointed to the right side of the bridge again, on the 2.2 billion. I think maybe some of the debate is that 2.2 billion gross or net. It feels like you're saying it's both how much of that is truly in your control, kind of independent of everything else going on in the macro environment and even the yield environment. And I guess the other part, another part of that would be if the non-hard borrowing demand even doesn't play out the way that you've kind of expected it to other other kind of variable cost levers to pull? Or is this strictly just more of a structural drive cost initiative for fiscal 25? Unidentified Participant Sure. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 25, 2024 / 9:00PM, FDX.N - Q4 2024 FedEx Corp Earnings Call

Question: Jordan Alliger - Goldman Sachs & Company, Inc. - Analyst : Yes, Hi, afternoon. A question on the sort of the low to mid single digit revenue growth that you talked about for the year. Is there a way to think about and the blend between the yield and volume. Is that two and two something along those lines? And then just sort of along those lines, I think you gave some color around B2B volumes of demand of up 2% or so. I'm just sort of wondering, with retailers may be doing more of this just in time focus these days. Does that sort of play into B2B and fast cycle logistics companies like feta? Unidentified Participant Yes. Yes.

Question: Brian Ossenbeck - J.P. Morgan Securities LLC - Analyst : Hey, good afternoon. Thanks for taking the question. So Bruce, maybe just to follow up on the demand environment itself, we expect from peak season and how the planning and integration visibility, I guess more importantly, is going with the major figures relative to prior years where it's been a little bit harder to it may be the right information and the right assets in place. And then, John, can you just give us any sense, maybe I want to give quarterly guidance, but any sense in terms of how to drive 2.2 billion we'll roll out throughout each quarter this year?

Question: Bascome Majors - Susquehanna Financial Group, LLLP - Analyst : For the investment community.

Question: Ravi Shanker - Morgan Stanley & Co. LLC - Analyst : Your line is the number one. I just want to confirm that the headcount reductions in Europe were they part of drive?

Question: David Vernon - Bernstein Institutional Services LLC - Analyst : Hey, guys, thanks for the time.

Question: Stephanie Moore - Jefferies LLC - Analyst : Hi, good afternoon. Thank you, intermediate. A question for Brian here. Of you noted, you're pleased by the pricing capture that you've been able to achieve. I noted in light of the current pricing environment. Can you maybe talk a little bit about what you're seeing in the current pricing environment from a competitive standpoint or overall rationality? Unidentified Participant Thanks. Sure.

Question: Bruce Chan - Stifel, Nicolaus & Company, Inc. - Analyst : Thanks and good afternoon, everyone. Lots of good and interesting stuff happening here, but maybe just switching gears a little bit. We've got some elections coming up. And I'm just curious how big of an issue, you know, tariffs have been as part of your customer discussions to date? And maybe more specifically, just given your commentary brief around China, e-commerce. You've got a couple of big direct e-com customers. Can you just maybe remind us of how big they are right now as a percentage of your book and what's maybe there volumes here if there is a change in trade policy?