FedEx (FDX) shares jumped in extended trading Thursday after the shipping giant announced plans to spin off its Freight business as a standalone company.
The shipping giant said the process to separate its Freight business will start immediately, and likely be completed within the next 18 months.
Ahead of the announcement, Citi analysts said last week that spinning off the Freight business into a standalone company could “unlock value” for the business, but suggested the move might not be the best option in the long term.
FedEx reported fiscal second-quarter revenue of $22 billion, down from $22.17 billion the same time last year and below the $22.14 billion analysts expected. Profits also fell to $741 million, compared to $900 million a year ago, missing analysts’ projections.
After adjusting for $249 million in “business optimization costs,” FedEx reported $990 million in adjusted net income, better than the $976.6 million analysts had expected.
FedEx shares jumped roughly 8% in extended trading following the report’s release. They were up about 9% for 2024 through Thursday’s close.