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FedEx officials are "confident" in their path ahead after posting third quarter earnings that beat expectations.

In Thursday's earnings release, FedEx reported it made $21.7 billion in revenue for the 2024 fiscal year’s third quarter that ended Feb. 29, which was a decrease from the 2023 fiscal year of $22.8 billion. However, the company posted an operating income of $1.24 billion for the 2024 third quarter, which was an increase from $1.04 billion in 2023.

The Memphis-based logistics giant also reported $879 million in net income for the third quarter, which was more than the $771 million reported in 2023.

The company’s third quarter income and margin improved despite lower revenue largely because of the execution of the company’s DRIVE program and the continued focus on revenue quality.

The DRIVE initiative has a goal of generating $4 billion of permanent cost reductions for FedEx by fiscal 2025. It is a multiyear effort to improve the efficiency with which FedEx picks up, transports and delivers packages in the U.S. and Canada.

“FedEx delivered another quarter of improved profitability in what remains a difficult demand environment, reflecting outstanding service and continued benefits from DRIVE,” FedEx Corp. President and CEO Raj Subramaniam said in a news release. “We are making meaningful progress on our transformation, while strengthening our value proposition and improving the customer experience. I’ve never been more confident in our path ahead as we build a more flexible, efficient, and intelligent network.”

FedEx Express and FedEx Ground both saw improved operating results partly due to lower structural costs resulting from DRIVE initiatives. FedEx Freight's operating results decreased due to lower fuel surcharges, reduced weight per shipment and lower shipments, the company said.

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“DRIVE is having a real impact, supporting both operating income growth and margin expansion,” said John Dietrich, FedEx Corp. executive vice president and chief financial officer. “As we look ahead, we’re focused on continuing to deliver on DRIVE and our commitments to support long-term shareholder returns.”

Also announced Thursday, the FedEx board of directors has authorized a new $5 billion share repurchase program. This builds on the $5 billion share repurchase program announced in 2021, in which $600 million remains available for repurchase.

"It is my top priority to continue to make the changes necessary to align our air network with an evolving demand environment and unlock the full profit opportunity," Subramaniam said. "While we have progress at FedEx Express this quarter, there are several areas that we are aggressively working to address in order accelerate profit improvement that consist of service mix, network utilization, continued inflation and other cost headwinds."

FedEx completed a $1 billion accelerated share repurchase transaction in the third quarter and expects to repurchase an additional $500 million of common stock in the fourth quarter, which will bring the fiscal 2024 buyback total to $2.5 billion.

During the earnings call, Subramaniam congratulated longtime executive Rob Carter, who is set to retire this year. Carter joined the Memphis-based company in 1993. He served as chief information officer for the past 24 years.

Effective July 1, Sriram Krishnasamy, executive vice president and chief transformation officer for FedEx Corp. and the president and CEO of FedEx Dataworks, will serve as chief digital and information officer, according to a news release.

FedEx stock closed Thursday at $264.85, up from its previous close of $259.99.

FedEx confirms layoffs

Although not discussed during its earnings call Thursday, FedEx did confirm recent layoffs. The company did not provide any specifics about how many positions were eliminated, what areas they were in or its current employee total.

FedEx issued this statement Friday to The Commercial Appeal:

"We made the difficult decision to reduce a small percentage of positions as we streamline and realign functions. Decisions of this nature are never made lightly and are the result of much thought and consideration for the needs of our business. We are actively working with those affected by these changes to ensure they have the support they need during this transition."

Corey Davis is the Collierville and Germantown reporter with The Commercial Appeal. He can be reached at Corey.Davis@commercialappeal.com or 901-293-1610.

This article originally appeared on Memphis Commercial Appeal: FedEx earnings: $5 billion share buyback planned. Here's what we know