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Shares of FedEx (NYSE:FDX) are trading 3.5% higher in pre-market after the company announced plans to consolidate its operating companies into one organization.
During the much anticipated DRIVE Investor Event, FedEx said its actions aim at enhancing “the company’s ability to meet the evolving needs of customers and ultimately build a stronger, more profitable enterprise.”
The full implementation of this process is expected to be completed in June 2024 and will see FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies into Federal Express Corporation.
“This organizational evolution reflects how we represent ourselves in the marketplace – focused on flexibility, efficiency, and intelligence. As one FedEx team, we are well positioned to execute on our mission to help customers compete and win with the world’s smartest logistics network,” said Raj Subramaniam, president, and CEO.
Moreover, the company said its DRIVE initiatives are expected to generate $4 billion in savings in fiscal 2025.
FedEx also announced its board approved an increase in the annual dividend rate on its common stock of 10%, or $0.44 per share, to $5.04 per share for fiscal 2024.
Vital Knowledge analysts said commented that “it doesn’t seem as if any of the announcements so far today are terribly incremental.”
