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.

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