FedEx Corp reported after the close Monday missing expectations on costs and wage rises giving us insight into the economy and the threats from online retail giant $AMZN and rivals $UPS and DHL.$ORCL lifted its adjusted EPS guidance.
FedEx Corp reported after the close Monday missing expectations on costs and wage rises giving us insight into the economy and the threats from online retail giant $AMZN and rivals $UPS and DHL. $ORCL lifted its adjusted EPS guidance.
FedEx has been a star of the the bull market rally this year but now appears threatened.
FedEx Corporation NYSE: FDX Missed Earnings After Close Monday
$3.46 Missed $3.78 EPS But $17.1 billion Beat $16.88 billion forecast in revenue.
FedEx Earnings for the fiscal first quarter rose 40% to $835 million or $3.10 per share. Adjusted EPS soared by 37.8% to $3.46.on revenue of $17.1 billion which missed expectations of $3.78 a share but beat revenue expectations of $16.88 billion.
$FDX accelerated wage increases for certain hourly employees in Q4 due to the enactment of GOP tax cuts. Combined, these items hurt results by $170 million, or 48 cents a share. FedEx recognized substantially higher variable compensation accruals during Q1, as last year’s results were hurt by the NotPetya cyberattack at TNT Express.
FedEx Corporation NYSE: FDX
Market Reaction After hours $250.21 −5.52 (-2.16%)
“As expected, the quarter’s results were affected by our decision to invest in our team members following the passage of the Tax Cuts and Jobs Act,” said CFO Alan Graf in a statement. “We remain committed to increasing earnings, margins, cash flows and returns this year.”
- FedEx Ground revenues increased by 13%
- FedEx Freight revenues rose by 18%.
FedEx raised its full-year EPS view to $17.20-$17.80 from a prior forecast of $17.00-$17.60, with the midpoint above consensus for $17.31. $FDX reaffirmed its revenue growth outlook of 9% and operating margin estimate of about 7.9%.
United Parcel Service ($UPS) reported an 8.2% increase in its second-quarter earnings to $1.71 per share beating Wall Street estimates last week. UPS’s revenue increased by 9.6% helped by growth across all segments.
Analysts see FedEx and UPS being be affected by Amazon’s ($AMZN) venture into the delivery space.
Sources: FedEx, AlphaStreet
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