FedEx shares soared more than 15% after hours Tuesday after the company reported results that topped analysts’ estimates in both earnings and revenue.

Here’s how the company did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: $5.41 adjusted vs. $5.35 expected
• Revenue: $22.11 billion vs. $22.07 billion expected

The company reported net income for the three-month period that ended May 31 of $1.47 billion, or $5.94 per share, compared with $1.54 billion, or $6.05 per share, a year earlier.

Revenue rose to $22.1 billion, up slightly from $21.9 billion a year earlier. For the full fiscal year, revenue was $87.7 billion, down from $90.2 billion.

FedEx reported that capital spending for fiscal 2024 was $5.2 billion, down 16% from $6.2 billion in fiscal 2023 and less than the $5.7 billion it forecasted in its fiscal 2024 guidance last year.

For fiscal 2025, the company said it expects low to mid-single-digit revenue growth year over year, driven in large part by e-commerce and low-inventory levels, FedEx Chief Customer Officer Brie Carere said on the company’s earnings call.

“We think e-commerce is going to outpace the B2B growth,” Carere said. “We like the fundamentals from an e-commerce perspective that will help us here in the United States and around the world.”

The capital spending decline comes as the company amps up its cost-cutting measures as part of a sweeping commitment to cut $4 billion by the end of fiscal 2025.

Following weak freight demand, FedEx enacted its DRIVE transformation program to cut costs and consolidate the business.

“DRIVE continues to change the way we work at FedEx. We achieved our target of $1.8 billion in structural costs out in fiscal year ’24,” CEO Raj Subramaniam said on the call.

Subramaniam said the company is firmly on track to achieve the $4 billion cost-cutting goal and further expects another $2 billion from the company’s plans to consolidate its air and ground services.

As part of the DRIVE initiative, FedEx announced in April 2023 that it will be consolidating its delivery companies Express, Ground, Services and others into a unified Federal Express Corporation, operating under the FedEx brand and alongside the company’s Freight segment which will continue to exist separately. The company said at the time that it expects the combined delivery business to handle all deliveries starting June 2024.

The newly combined segments are expected to be the larger driver of fiscal year 2025 adjusted income and margin improvement, finance chief John Dietrich said on the call.

FedEx further expects the demand environment to moderately improve through the next fiscal year, according to Carere.

Investor’s eyes are also on the company’s largest segment Express, which has been struggling with margin growth the past year. The segment’s margins ended the fourth quarter at 4.1%, unchanged year over year. Its operating margin for fiscal 2024 was 2.6%, up slightly from 2.5% last year.

Subramaniam said improving performance of the Express segment is a “top priority” for the company.

While the company hiked its quarterly dividend by 10% earlier this month, investors do foresee headwinds, particularly after the company lost its U.S. Postal Service contract to rival United Parcel Service n April.

UPS will become the primary air cargo provider for USPS starting Sept. 30, after FedEx’s contract expires. USPS was the largest customer for the company’s Express segment. The company shared that it expects a $500 million headwind from the loss in fiscal 2025.