FedEx to spin off its less-than-truckload freight business

(Reuters) -FedEx announced the much-anticipated spinoff of its less-than-truckload freight division on Thursday, as it looks to restructure its operations and focus more on its core delivery business.

Shares of the parcel delivery giant rose about 10% in after-hours trading.

Analysts believe the spinoff could unlock up to $20 billion in shareholder value while clearing the way for FedEx management to focus on restructuring, potentially boosting long-term growth prospects for its core package operations and what will become a separate freight business.

FedEx Freight is the largest U.S. provider of less-than-truckload services, which involve carrying multiple shipments from different customers on a single truck; the shipments are then routed through a network of service centers where they get transferred to other trucks with similar destinations.

FedEx also said adjusted profit fell to $0.99 billion, or $4.05 per share, in the second quarter, from $1.01 billion, or $3.99 per share, a year earlier.

(Reporting by Lisa Baertlein in Los Angeles and Abhinav Parmar in Bengaluru; Editing by Alan Barona)