04:53 PM EST, 12/19/2024 (MT Newswires) -- FedEx's ( FDX ) fiscal second-quarter earnings rose more than expected, while revenue missed Wall Street's estimates as the parcel delivery company announced plans to spin off its freight operations into a separate publicly listed company.

Adjusted per-share earnings rose to $4.05 in the three months ended Nov. 30 from $3.99 a year earlier. The FactSet-polled consensus was for $4.01. Revenue fell to $22 billion from $22.2 billion, compared with Wall Street's $22.14 billion view.

FedEx ( FDX ) said late Thursday that creating a new less-than-truckload company will allow for more customized operational execution as the global parcel and LTL markets evolve. The separation is expected to be executed within the next 18 months.

"This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market," FedEx ( FDX ) Chief Executive Raj Subramaniam said in a statement. "Through this process, we will unlock value for our freight business and position FedEx ( FDX ) to create even greater value for stockholders."

Shares were up 8.9% in after-hours trading.

Consolidated second-quarter operating results were impacted by lower-than-expected freight revenue and profit as softness in US industrial production affected demand across the LTL industry, FedEx ( FDX ) said. The freight segment reported fewer shipments and reduced weight per shipment.

Operating results at Federal Express improved during the quarter amid cost cuts and higher international export volume.

"The Federal Express segment delivered operating profit growth despite several headwinds, including the continued weak US domestic demand environment, as well as the expiration of our US Postal Service contract," said Subramaniam.

FedEx ( FDX ) expects fiscal 2025 revenue to be flat year-over-year, compared with the prior forecast of a low-single-digit increase. Non-GAAP EPS is seen at $16.45 to $17.45 before certain retirement plan adjustments, compared with $17.90 to $18.90 previously expected. After excluding business optimization costs, the EPS outlook was pegged at $19 to $20, versus the prior guidance of $20 to $21. Analysts polled by FactSet project normalized EPS of $19.44.

"I remain confident FedEx ( FDX ) will continue to grow earnings this year despite the challenging demand environment, as we focus on transforming operations and improving revenue quality," Chief Financial Officer John Dietrich said.