FedEx (FDX) Q1 Earnings & Revenues Lag, FY18 View Bearish
Zacks Investment Research | Sep 20, 2017 08:45AM ET
FedEx Corporation (NYSE:FDX) reported disappointing results in the first quarter of fiscal 2018 (ended Aug 31, 2017). This downside was driven mainly by the cyberattack in June, affecting the company’s subsidiary, TNT Express. Hurricane Harvey has also hurt its operations.
The earnings and revenue miss discouraged investors. Consequently, the stock fell 1.4% in aftermarket trading on Sep 19.
The company’s earnings (excluding 32 cents from non-recurring items) of $2.51 per share significantly fell short of the Zacks Consensus Estimate of $3.17. Furthermore, the bottom line declined 13.5% on a year-over-year basis due to higher costs.
Quarterly revenues increased 4.3% year over year to $15,297 million, lagging the Zacks Consensus Estimate of $15,368.7 million. The top line was hurt primarily due to the TNT Express cyberattack.
Operating income (on an adjusted basis) decreased 6.8% year over year to $1.24 billion in the quarter primarily due to the cyberattack. Also, operating margin contracted to 8.1% during the quarter from 9.1% in first-quarter fiscal 2017.
Segmental Performance
Quarterly revenues at FedEx Express (including TNT Express) improved 2.2% to $8.65 billion, driven by hiked base rates and higher package volume. Operating income came in at $521 million, down 20.1% year over year, while operating margin reduced to 6% year over year. Operating results were hampered by the cyberattack.
FedEx Ground revenues gained 8% year over year to $4.64 billion in the fiscal first quarter. In fact, volume expansion and higher base rates aided the segmental performance during the reviewed quarter. Average daily volume rose 4% in the fiscal first quarter. Operating income came in at $626 million, up 3%. Operating margin declined 70 basis points (bps) to 13.5%.
FedEx Freight revenues rose 6% year over year to $1.75 billion. Segmental revenues were benefited by increased base rates and fuel surcharges. Also, the segment’s operating income surged 30% to $176 million. Plus, operating margin expanded 190 bps to 10%.
FedEx Corporation Price, Consensus and EPS Surprise
Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.