© Reuters. FedEx Earnings Miss, revenue beats in the third quarter
Investing.com – FedEx reported mixed third-quarter results on Tuesday as earnings were insufficient but sales exceeded analysts' estimates
FedEx (NYSE 🙂 shares rose 2.4% in after-hours trading.
FedEx announced earnings per share of $ 1.41 on sales of $ 17.49 billion. Analysts surveyed by Investing.com expected earnings per share of $ 1.53 on sales of $ 16.94 billion. This corresponds to earnings per share of $ 3.03 with sales of $ 17 billion in the same period last year. FedEx reported earnings per share of $ 2.51 in the previous quarter on sales of $ 17.32 billion. Analysts expect earnings per share of $ 3.31 and sales of $ 17.4 billion in the coming quarter.
The bottom line came despite margins falling from 5.8% to 2.8% due to numerous headwinds, including weaker global economic conditions given the novel corona virus and increased costs due to expanded service offerings.
"Operating results declined due to weaker global economic conditions, including the effects of the corona virus, higher self-insurance provisions, an unfavorable comparison with variable incentive remuneration, increased FedEx Ground costs due to expanded service offerings, the loss of business from a major customer and a continuing burden of switching to lower-level services Returns and a more competitive pricing environment, "said FedEx.
Looking ahead, the company withdrew its full-year earnings forecast due to the uncertainty caused by the Covid-19 outbreak, saying it would cut costs to offset short-term headwinds.
"We are suspending our earnings forecast for fiscal year 2020 for our consolidated results and segment results due to the uncertainty caused by the coronavirus pandemic," said CFO Alan B. Graf, Jr. "To mitigate this short-term headwind and position the company for future profits . " We are attacking costs across the enterprise by managing capacity, pulling our oldest and least efficient aircraft out of service, integrating TNT Express, and lowering our home delivery costs by delivering FedEx Ground FedEx SmartPost and certain days-long FedEx Express packages . "
FedEx shares have fallen 37.2% since the beginning of the year, still 52.36% from the 52-week high of $ 199.32 on April 18, 2019. They are underperforming since the beginning of the year by 21 , Has dropped 88%.
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