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How Will FedEx's (FDX) Ground Unit Fare in Q3 Earnings?
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FedEx Corporation’s (FDX - Free Report) Ground unit, which accounts for more than 30% of the company’s total revenues and around 59% of its operating income, is expected to be boosted by high revenues when it reports third-quarter fiscal 2021 results (quarter ended Feb 28, 2021) . Notably, this is the company’s second-largest revenue-generating unit after the Express division.
FedEx Ground offers a low-cost, day-certain service to any business address in the United States and Canada as well as residential delivery in the United States through its FedEx Home Delivery service.
Highlights of FedEx Ground’s Q2 Performance
FedEx Ground revenues rose 36% year over year to $7,344 million in second-quarter fiscal 2021 owing to residential delivery volume growth. Operating income came in at $552 million, up 61% year over year. Segmental operating margin expanded to 7.5% from 6.4% in the prior-year quarter.
Robust Revenues Likely to Reflect on FedEx Ground’s Q3 Results
The surge in e-commerce demand during the current coronavirus-ravaged times is likely to have boosted segmental revenues in the to-be-reported quarter with most people placing orders online. Backed by e-commerce growth, the Zacks Consensus Estimate for revenues in the fiscal third quarter at the FedEx Ground unit stands at $7,486 million, indicating an increase of 28.1% from the reported figure in the year-ago quarter.
Residential volume growth is likely to have driven Fedex Ground revenues in the quarter to be reported. The boom in online shopping during the holidays with the coronavirus pandemic continuing to restrict people to their homes is likely to have perked up segmental performance. Evidently, the Zacks Consensus Estimate for revenue per package in the fiscal third quarter at the FedEx Ground unit indicates a 6.6% rise from the year-ago reported figure.
However, the Ground segment’s results for the fiscal third quarter are likely to reflect the impact of high expenses. This is due to various types of investments made by the company like the ones pertaining to integrating smart post package volume into the Ground network.
Overall Earnings & Revenue Projections
Regarding FedEx, which competes with United Parcel Service (UPS - Free Report) in the package delivery space, the Zacks Consensus Estimate for earnings in the fiscal third quarter is pegged at $3.17, hinting at a 124.7% increase from the prior-year quarter’s reported figure. For quarterly sales, the consensus mark of $19.87 billion suggests an increase of 13.6% from the year-earlier quarter’s reported number.
Our Take
While high costs are likely to be reflected in the Ground segment’s results for the fiscal third quarter, soaring e-commerce volumes are likely to have contributed to revenues at FedEx Ground, which handles e-commerce deliveries for many retailers. Growth in residential deliveries might have also aided this presently Zacks Rank #3 (Hold) company’s overall performance in the fiscal third quarter.
Long-term expected earnings per share (three to five years) growth rate for Triton and Herc Holdings is pegged at 10% and 31.2%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
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How Will FedEx's (FDX) Ground Unit Fare in Q3 Earnings?
FedEx Corporation’s (FDX - Free Report) Ground unit, which accounts for more than 30% of the company’s total revenues and around 59% of its operating income, is expected to be boosted by high revenues when it reports third-quarter fiscal 2021 results (quarter ended Feb 28, 2021) . Notably, this is the company’s second-largest revenue-generating unit after the Express division.
FedEx Ground offers a low-cost, day-certain service to any business address in the United States and Canada as well as residential delivery in the United States through its FedEx Home Delivery service.
Highlights of FedEx Ground’s Q2 Performance
FedEx Ground revenues rose 36% year over year to $7,344 million in second-quarter fiscal 2021 owing to residential delivery volume growth. Operating income came in at $552 million, up 61% year over year. Segmental operating margin expanded to 7.5% from 6.4% in the prior-year quarter.
Robust Revenues Likely to Reflect on FedEx Ground’s Q3 Results
The surge in e-commerce demand during the current coronavirus-ravaged times is likely to have boosted segmental revenues in the to-be-reported quarter with most people placing orders online. Backed by e-commerce growth, the Zacks Consensus Estimate for revenues in the fiscal third quarter at the FedEx Ground unit stands at $7,486 million, indicating an increase of 28.1% from the reported figure in the year-ago quarter.
Residential volume growth is likely to have driven Fedex Ground revenues in the quarter to be reported. The boom in online shopping during the holidays with the coronavirus pandemic continuing to restrict people to their homes is likely to have perked up segmental performance. Evidently, the Zacks Consensus Estimate for revenue per package in the fiscal third quarter at the FedEx Ground unit indicates a 6.6% rise from the year-ago reported figure.
However, the Ground segment’s results for the fiscal third quarter are likely to reflect the impact of high expenses. This is due to various types of investments made by the company like the ones pertaining to integrating smart post package volume into the Ground network.
Overall Earnings & Revenue Projections
Regarding FedEx, which competes with United Parcel Service (UPS - Free Report) in the package delivery space, the Zacks Consensus Estimate for earnings in the fiscal third quarter is pegged at $3.17, hinting at a 124.7% increase from the prior-year quarter’s reported figure. For quarterly sales, the consensus mark of $19.87 billion suggests an increase of 13.6% from the year-earlier quarter’s reported number.
Our Take
While high costs are likely to be reflected in the Ground segment’s results for the fiscal third quarter, soaring e-commerce volumes are likely to have contributed to revenues at FedEx Ground, which handles e-commerce deliveries for many retailers. Growth in residential deliveries might have also aided this presently Zacks Rank #3 (Hold) company’s overall performance in the fiscal third quarter.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector are Triton International Limited and Herc Holdings (HRI - Free Report) , both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Triton and Herc Holdings is pegged at 10% and 31.2%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>