FedEx said Tuesday it would cut $1 billion more in costs after weak demand ate into its quarterly profit.

The company in September announced cost-cutting measures that included parking planes and closing some offices in the face of softening global demand. It also raised package-delivery rates. At the time, CEO Raj Subramaniam warned the economy would enter a ā€œworldwide recession.ā€

FedEx on Tuesday said it will be able to cut another $1 billion beyond what it forecast in September, to bring the total fiscal 2023 savings to $3.7 billion compared with its earlier plan for the year.

ā€œOur teams have an unwavering focus on rapidly implementing cost savings to improve profitability,ā€ CFO Mike Lenz said in an earnings release. ā€œAs we look to the second half of our fiscal year, we are accelerating our progress on cost actions, helping to offset continued global volume softness.ā€

Most of the additional cuts will stem from FedExā€™s Express unit, such as additional flight cuts, Lenz said on an earnings call. Other cuts include adjustments in the Ground unit in pick-up and delivery.

The company has reduced U.S. domestic flight hours by 6% and international by 7% so far this year. By the end of the fiscal year, FedEx said, it expects to park 11 additional aircraft, mostly wide-body planes.

FedEx shares were up more than 3% in after-hours trading.

Hereā€™s how FedEx performed in its fiscal second quarter of 2023, compared with Refinitiv consensus estimates:

  • Earnings per share: $3.18 adjustedĀ vs. $2.82Ā expected
  • Revenue: $22.8 billion vs. $23.74 billion expected

FedExā€™s net income fell to $788 million in the three months ended Nov. 30, down from $1.04 billion a year earlier. Sales fell to $22.8 billion in that period, down from $23.5 billion a year earlier, falling short of estimates.

Adjusting for one-time items, FedEx posted per share earnings of $3.18, ahead of analyst estimates but well off the $4.83 a share it reported during the same period of last year.

The company posted particular weakness in its Express unit, with operating income in that segment down 64% from last year. FedEx Ground operating income rose 24% from last year, and FedEx freight operating income increased 32% year over year. All three units were helped by higher yields.

FedEx forecast full-year earnings per share of between $13 and $14, just shy of analystsā€™ expectations of $14.08 per share.

The companyā€™s shares are down about 36% for the year as of Tuesdayā€™s close, compared with the S&P 500ā€²s roughly 20% decline.

FedExā€™s sales and profit fell last quarter from the year-ago period.

It said it will be able to cut another $1 billion beyond what it forecast in September.

The company posted particular weakness in its Express unit.