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FedEx (FDX) Misses on Q4 Earnings, Shares Fall More Than 4%
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FedEx Corporation’s (FDX - Free Report) fourth-quarter fiscal 2021 (ended May 31, 2021) earnings (excluding $1.87 from non-recurring items) of $5.01 per share missed the Zacks Consensus Estimate of $5.04. The bottom line surged approximately 98% year over year, driven by higher revenues across all segments. Despite significant bottom-line growth, the earnings miss might have disappointed investors, causing shares of the company to fall 4.4% in after-hours trading on Jun 24.
Quarterly revenues of $22,565 million outperformed the Zacks Consensus Estimate of $21,744.9 million and increased 30% year over year, primarily owing to higher volumes, thanks to coronavirus-driven rise in demand for package delivery and freight services. Operating income (on an adjusted basis) soared more than 100% year over year to $1.97 billion in the reported quarter. Operating margin (adjusted) also improved to 8.7% from 5.2% in the year-ago period.
Segmental Performance
Quarterly revenues at FedEx Express (including TNT Express) ascended 32% to $11,275 million due to international export and U.S. domestic-package volume growth. Segmental operating income increased more than 100% year over year to $737 million. Also, segmental operating margin improved to 6.5% from 3.9% in fourth-quarter fiscal 2020.
FedEx Ground revenues surged 27% year over year to $8,132 million in the period under consideration, owing to strong growth in business-to-business shipments and a 14% rise in revenues per package. Operating income came in at $1,105 million, augmenting 64% year over year. Segmental operating margin also improved to 13.6% from 10.5% in the prior-year quarter.
FedEx Freight revenues climbed 38% year over year to $2,235 million due to higher revenues per shipment as well as higher average daily shipments. The segment’s operating income ascended more than 100% to $360 million, thanks to focus on revenue qualitative initiatives. Operating margin increased to 16.1% from 8.2% in the year-ago period.
FedEx Corporation Price, Consensus and EPS Surprise
For fiscal 2022, FedEx anticipates earnings per share, before the year-end MTM retirement plan accounting adjustment and other costs, in the band of $20.50-$21.50. The mid-point of the guided range, $21, lies above the Zacks Consensus Estimate of $20.60.
Additionally, the company estimates fiscal 2022 earnings per share in the range of $18.90-$19.90, before the MTM retirement plan accounting adjustments.
Effective tax rate, before the year-end MTM retirement plan accounting adjustment, is expected to be approximately 24% in fiscal 2022. Meanwhile, capital expenditures are predicted to be $7.2 billion in fiscal 2022, higher than $5.88 billion incurred in fiscal 2021. The capital spending will primarily be aimed at capacity expansion, fleet and facility modernization, and increased automation.
Shares of C.H. Robinson, Expeditors and Covenant Logistics have rallied more than 23%, 70% and 58% in a year’s time, respectively.
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FedEx (FDX) Misses on Q4 Earnings, Shares Fall More Than 4%
FedEx Corporation’s (FDX - Free Report) fourth-quarter fiscal 2021 (ended May 31, 2021) earnings (excluding $1.87 from non-recurring items) of $5.01 per share missed the Zacks Consensus Estimate of $5.04. The bottom line surged approximately 98% year over year, driven by higher revenues across all segments. Despite significant bottom-line growth, the earnings miss might have disappointed investors, causing shares of the company to fall 4.4% in after-hours trading on Jun 24.
Quarterly revenues of $22,565 million outperformed the Zacks Consensus Estimate of $21,744.9 million and increased 30% year over year, primarily owing to higher volumes, thanks to coronavirus-driven rise in demand for package delivery and freight services. Operating income (on an adjusted basis) soared more than 100% year over year to $1.97 billion in the reported quarter. Operating margin (adjusted) also improved to 8.7% from 5.2% in the year-ago period.
Segmental Performance
Quarterly revenues at FedEx Express (including TNT Express) ascended 32% to $11,275 million due to international export and U.S. domestic-package volume growth. Segmental operating income increased more than 100% year over year to $737 million. Also, segmental operating margin improved to 6.5% from 3.9% in fourth-quarter fiscal 2020.
FedEx Ground revenues surged 27% year over year to $8,132 million in the period under consideration, owing to strong growth in business-to-business shipments and a 14% rise in revenues per package. Operating income came in at $1,105 million, augmenting 64% year over year. Segmental operating margin also improved to 13.6% from 10.5% in the prior-year quarter.
FedEx Freight revenues climbed 38% year over year to $2,235 million due to higher revenues per shipment as well as higher average daily shipments. The segment’s operating income ascended more than 100% to $360 million, thanks to focus on revenue qualitative initiatives. Operating margin increased to 16.1% from 8.2% in the year-ago period.
FedEx Corporation Price, Consensus and EPS Surprise
FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation Quote
Outlook
For fiscal 2022, FedEx anticipates earnings per share, before the year-end MTM retirement plan accounting adjustment and other costs, in the band of $20.50-$21.50. The mid-point of the guided range, $21, lies above the Zacks Consensus Estimate of $20.60.
Additionally, the company estimates fiscal 2022 earnings per share in the range of $18.90-$19.90, before the MTM retirement plan accounting adjustments.
Effective tax rate, before the year-end MTM retirement plan accounting adjustment, is expected to be approximately 24% in fiscal 2022. Meanwhile, capital expenditures are predicted to be $7.2 billion in fiscal 2022, higher than $5.88 billion incurred in fiscal 2021. The capital spending will primarily be aimed at capacity expansion, fleet and facility modernization, and increased automation.
Zacks Rank & Other Key Picks
FedEx carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Transportation sector are C.H. Robinson Worldwide (CHRW - Free Report) , Expeditors International of Washington (EXPD - Free Report) and Covenant Logistics Group (CVLG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of C.H. Robinson, Expeditors and Covenant Logistics have rallied more than 23%, 70% and 58% in a year’s time, respectively.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>