FedEx (FDX) earns more than 4% on third quarter profit and revenue
FedEx Corporation FDX posted strong results for the third quarter of fiscal 2021 (ended February 28, 2021) despite a harsh winter that affected performance in February. Following this, the company’s shares rose 4.4% in after-hours trading on March 18.
Company earnings (excluding 17 cents from one-time items) of $ 3.47 per share topped Zacks’ consensus estimate of $ 3.21. Net income grew more than 100% year-over-year, driven by higher volumes from FedEx International Priority and domestic US residential plan services, as well as pricing initiatives across all transport segments.
Quarterly revenue of $ 21,510 million topped Zacks’ consensus estimate of $ 19,970.9 million and was up 23% year-over-year, mainly due to higher volumes, thanks to increased demand for e-commerce induced by coronaviruses. Operating profit (on an adjusted basis) climbed more than 100% year-on-year to $ 1.06 billion in the current quarter due to increased demand for home delivery services due pandemic and improved performance. The (adjusted) operating margin also improved to 4.9% from 2.8% a year earlier.
FedEx Corporation, Consensus and BPA Surprise Award
FedEx Corporation price-consensus-eps-surprise-chart | FedEx Corporation quote
Quarterly revenues of FedEx Express (including TNT Express) increased 20.9% to $ 10.79 billion due to growth in international exports and domestic package volume in the United States. Segment operating profit increased to $ 463 million from $ 137 million a year ago. In addition, the segment operating margin improved to 4.3% from 1.5% in the third quarter of fiscal 2020.
FedEx Ground revenue jumped 36.5% year-on-year to $ 7,980 million during the review period, driven by growth in residential delivery volume. Operating profit was $ 702 million, up 97.7% year-over-year. The segment operating margin also improved to 8.8% from 6.1% in the previous year quarter.
FedEx Freight revenue increased 5.6% year-over-year to $ 1,836 million due to higher revenue per shipment and average daily shipments. Segment operating income increased 5.3% to $ 119 million, driven by a focus on qualitative revenue initiatives. The operating margin is stable at 6.5%.
For fiscal 2021, FedEx forecasts earnings per share, before the accounting adjustment for the year-end MTM pension plan and debt refinancing costs, in the range of $ 16.80 to 17.40 $. The midpoint – $ 17.1 – of the Guided Range is below Zacks’ consensus estimate of $ 17.33.
In addition, the company estimates fiscal 2021 earnings per share to range from $ 17.60 to $ 18.20, before the costs of accounting adjustment and debt refinancing of the late MTM pension plan. year, and excluding TNT Express integration expenses, costs associated with activities realignment activities and the second – Fiscal quarter 2021 Accounting adjustment of the MTM TNT Express pension plan.
The effective tax rate, before the accounting adjustment for the year-end MTM pension scheme, is expected to be between 21% and 22%. Meanwhile, capital spending is expected to rise to $ 5.7 billion in fiscal 2021, more than the $ 5.1 billion previously anticipated, due to the acceleration of government initiatives. expansion of FedEx Ground capacity, among other factors.
Zacks rank and choice of keys
FedEx wears a Zacks Rank # 3 (Hold). Some actions better ranked in the Transport sector are ArcBest Corp. ARCB, Saia, Inc. SAIA and Mesa Air Group, Inc. MESA, each wearing a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank (Fort Buy) stocks here.
Shares of ArcBest, Saia and Mesa Air have risen by over 100%, 85% and 300% in the past six months, respectively.
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