FedEx benefited from the shift to online shopping during the pandemic.
Benoit Doppagne/BELGA/AFP via Getty ImagesFedEx made investors happy Thursday, reporting another better-than-expected quarter and providing strong guidance for the current quarter. The parcel shipper’s stock shot up in after-hours trading.
For the fiscal third quarter ended Feb. 28, FedEx (ticker: FDX) reported $3.47 in adjusted per-share earnings from $21.5 billion in sales. Wall Street was looking for about $3.20 in per-share earnings from $20 billion in sales. A year ago, the company earned $1.41 a share from $17.5 billion in sales.
This is the third consecutive quarter that FedEx beat estimates. The pandemic has accelerated the shift to online shopping, benefiting FedEx.
The company also reported $3.30 in unadjusted, or GAAP, earnings. (GAAP stands for generally accepted accounting principles.) Many companies report both adjusted and unadjusted figures. The difference in the case of FedEx is mainly integration expenses for its acquisition of TNT Express in 2016.
FedEx stock is up about 4% in after-hours trading. That’s good news for FedEx bulls. After an incredible 2020, when the stock rose about 72%, shares have stagnated, dropping about 4% over the past three months.
Operating profit margins for the quarter just reported came in at 4.9%. The company says severe weather lowered profits by an estimated $350 million. Excluding the weather impact, operating profit came in at about $1.4 billion, more than $200 million better than analysts predicted.
FedEx also gave full-year 2021 guidance, though it has one quarter left in its fiscal year. FedEx expects to earn about $17.90 for the full fiscal year 2021 ending in May. That means fiscal fourth-quarter earnings should be about $4.90 a share. That’s better than the $4.60 that Wall Street projects.
“As reflected in this quarter’s results, continued execution of our strategies is producing strong earnings growth and margin improvement across ourcompany,” said CEO Fred Smith in the company’s news release.
Year to date, FedEx stock, as of Thursday’s closing price, is up about 1.5%. The S&P 500 and Dow Jones Industrial Average, by comparison, are up about 4% and 7%, respectively.
Write to Al Root at allen.root@dowjones.com
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FedEx Beats Earnings Again and Gives Strong Guidance - Barron's
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