Logistics giant FedEx Corporation (NYSE: FDX) reported a narrower loss in the fourth quarter of 2020 on lesser retirement plans expense. However, in general, the results continued to show weakness in the core business due to the disruptions caused by the COVID-19 crisis. The results exceeded analysts’ expectations.
While commercial volumes were down significantly due to business closures across the globe, there were surges in residential deliveries at FedEx Ground and in transpacific and charter flights at FedEx Express, which required incremental costs to serve.
The company has been facing an unfavorable pricing environment and rising costs due to the weakness in the global economic conditions, which got aggravated by the global pandemic. The loss of business and a continuing mix shift to lower-yielding services hurt the top-line.
FedEx is not providing an earnings forecast for fiscal 2021 as the timing and pace of an economic recovery are uncertain. Capital expenditures for fiscal 2021 are targeted to be about $4.9 billion, a $1 billion year-over-year decline, due primarily to reduced vehicle replacement spending and delayed facility investments.
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