FedEx is consolidating all of its operating companies into “one organization.”
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FedEx,
the logistics giant, is showing confidence in its future with a big dividend boost ahead of its investor event. Shareholders are pleased.
On Wednesday, FedEx (ticker: FDX) hiked its annual payout to shareholders by 44 cents, to $5.04. A quarterly dividend of $1.26 a share is payable on July 3.
FedEx stock is up 3.2% in premarket trading at $233.86 a share.
S&P 500
and
Dow Jones Industrial Average
futures are both down about 0.1%.
The dividend increase came ahead of the company’s investor event which began at 8:30 a.m. Eastern time. Along with the dividend, FedEx announced some changes to its corporate structure.
The company is consolidating all of its operating companies, which essentially means FedEx Express, FedEx Ground, and FedEx Services will integrate and operate as one unit. That should help drive efficiencies and, in theory, eliminate the need for an express driver and ground driver to each make a stop at the same home or business on the same day.
FedEx will continue to operate its less-than-truckload, or LTL, business separately. LTL typically serves industrial customers. Freight in an LTL business moves shorter distances.
“Over the last 50 years, we built networks that have created a differentiated and unmatched portfolio of services,” said CEO Raj Subramaniam in a news release. “This organizational evolution reflects how we represent ourselves in the marketplace—focused on flexibility, efficiency, and intelligence.”
Subramaniam was named CEO-elect in March 2022 and took over on June 1. Investors appear pleased with the direction of the company under his watch. Shares are up about 31% year to date. Shares also jumped about 8% after the company reported fiscal-third-quarter numbers on March 16. FedEx reported per-share earnings of $3.41. Wall Street was looking for $2.71.
The results were taken as a sign that some of the company’s cost-cutting actions were taking hold.
Write to Al Root at [email protected]
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