FedEx on Thursday announced rate hikes and detailed its cost-cutting efforts after the shipping giant warned last week that its fiscal first quarter results were hit by weakening global demand.
Shares of FedEx were up about 2% Thursday afternoon.
Last week, the company’s stock sank after it posted preliminary revenue and earnings that fell short of Wall Street expectations. CEO Raj Subramaniam cited a tough macroeconomic environment, and said he expects the economy to enter a “worldwide recession.” The company withdrew its guidance for the year and said it would slash costs.
The shipping giant struggled with light volumes in the quarter, citing headwinds in its Europe and Asia markets. The poor results shocked the market, as investors tried to distinguish market woes from FedEx’s own internal shortcomings.
In issuing its full first quarter results Thursday, the company said that its Express, Ground and Home Delivery rates will increase by an average of 6.9%. Its FedEx Freight rates will increase by an average of 6.9%-7.9%, the company said.
It also said it believes it will save between $1.5 billion and $1.7 billion by parking planes and reducing flights. The closure of certain locations, the suspension of some Sunday operations, and other expense actions will save FedEx Ground between $350 million and $500 million, according to the company.