FedEx shares rose after a large dividend increase
FedEx
,
the logistics giant, shows confidence in the future with a big dividend boost ahead of the investor event. The shareholders are satisfied.
On Wednesday, FedEx (ticker: FDX) increased its annual payout to shareholders by 44 cents, to $5.04. A quarterly dividend of $1.26 per share is paid on July 3.
FedEx shares are 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 company̵[ads1]7;s investor event that began at 8:30 a.m. ET. Along with the dividend, FedEx announced some changes to its corporate structure.
The company is consolidating all of its operating companies, which essentially means that FedEx Express, FedEx Ground and FedEx Services will integrate and operate as one entity. That should help increase efficiency and, in theory, eliminate the need for an express driver and ground driver to each stop at the same home or business on the same day.
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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 past 50 years, we have built networks that have created a differentiated and unmatched portfolio of services,” CEO Raj Subramaniam said in a press release. “This organizational development reflects how we represent ourselves in the market – focused on flexibility, efficiency and intelligence.”
Subramaniam was appointed as newly elected CEO in March 2022 and took over on 1 June. Investors seem to be happy with the management of the company under his watch. The shares have risen by 31% so far this year. Shares also rose around 8% after the company reported third-quarter numbers on March 16. FedEx reported earnings per share of $3.41. Wall Street was looking for $2.71.
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The results were taken as a sign that some of the company’s cost-saving measures were taking hold.
Write to Al Root at allen.root@dowjones.com
