07:06 AM EDT, 06/26/2024 (MT Newswires) -- FedEx ( FDX ) provided upbeat earnings guidance for fiscal 2025 as the company's ongoing cost reduction efforts helped it top market expectations in the fourth quarter.

Adjusted earnings, excluding expenses related to business optimization initiatives, are anticipated to come in between $20 and $22 per share for fiscal 2025, the company said late Tuesday. The consensus on Capital IQ is for normalized EPS of $21.21. For the 2024 fiscal year ended May 31, the company's adjusted EPS increased to $17.80 from $14.96 reported last year.

Revenue is pegged to grow by a low-to-mid single-digit percentage for the ongoing year, "driven by improving trends in US domestic parcel and international export demand," Chief Financial Officer John Dietrich said during an earnings call, according to a Capital IQ transcript. "And consistent with what we have seen over the past year, we're anticipating a pricing environment that is competitive but rational." Revenue declined 3% year over year to $87.69 billion in fiscal 2024.

The package delivery giant continues to target permanent cost reductions of $2.2 billion in fiscal 2025, having saved $1.8 billion in the prior year, as part of its larger DRIVE restructuring program to consolidate its operating companies into a single, integrated air-ground network. "We remain committed to aggressively managing our cost structure," Dietrich said on the call.

For the fourth quarter, the company's adjusted EPS rose to $5.41 from $4.94 the year before, ahead of the Street's view for $5.37. Revenue improved to $22.11 billion from $21.93 billion reported in the previous year, just above analysts' $22.06 billion estimate. Shares of the company surged over 14% in recent premarket activity.

Revenue in the express segment remained nearly flat at $10.42 billion as "yield growth was pressured by a tapering of international export demand surcharges and an increasing mix of deferred services," Chief Customer Officer Brie Carere told analysts. The ground operations recorded revenue growth of 2%, amid a 1% increase each in yield and volumes, Carere said.

The freight business reported revenue of $2.31 billion, up from $2.27 billion in the prior-year quarter, as average daily shipments "increased slightly," according to Carere. FedEx ( FDX ) said it will evaluate its freight business to potentially unlock shareholder value, with the review expected to be completed by the end of the calendar year.

Total operating expenses edged higher to $20.55 billion from $20.43 billion last year. The company incurred a noncash impairment charge of $157 million during the fourth quarter, as a result of its decision to permanently retire 22 Boeing (BA) 757-200 aircraft and seven related engines.

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