Image: Bigstock

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.