Esther Fung and Connor Hart of The Wall Street Journal report that FedEx has announced its decision to spin off its freight trucking division in a move aimed at streamlining its structure and unlocking value that shareholders believe has been obscured within the larger company. They write:
FedEx has decided to spin off its freight trucking division, moving to streamline its structure and unlock value that some shareholders argue has been lost inside the delivery giant.
Shares surged 8% in after-hours trading, even as the company reported lower quarterly profits and trimmed its financial goals for the rest of its fiscal year. Executives cited weak demand in the freight segment and its U.S. parcel business for the revised outlook. […]
The division had more than $9 billion in revenue in the last fiscal year, and some analysts have estimated the unit could be worth much more as a stand-alone public company. […]
For the current fiscal year, FedEx now expects revenue to be flat, compared with an earlier forecast for a small percentage increase. It lowered its adjusted per-share earnings outlook to a range of $19 to $20, down from a prior a range of $20 to $21.
Analysts surveyed by FactSet had expected adjusted earnings of $19.44 a share on revenue of $88.43 billion, an increase of less than 1% from a year ago.
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