X

FedEx misses Q1 profit estimates, stock slides

FedEx (FDX) reported a 40% jump in earnings for the first quarter helped by higher volumes, increased yields and a favorable net impact of fuel at all transportation segments. The top line exceeded market consensus. The company also lifted its earnings guidance for the fiscal year 2019. The shipping giant’s stock inched lower by 2.59% in the after-hours session following its bottom line missing analysts’ expectations.

Earnings for the quarter climbed 40% to $835 million or $3.10 per share. The results benefited from the tax reform enactment. Adjusted EPS soared by 37.8% to $3.46. FedEx recognized substantially higher variable compensation accruals during the latest quarter.

Revenue advanced by 11.8% to $17.1 billion. Strong e-commerce deliveries growth drove FedEx Express revenues higher by 10%. FedEx Ground revenues increased by 13% and FedEx Freight revenues rose by 18%.

Looking ahead into the fiscal year 2019, the company lifted its adjusted EPS guidance to the range of $17.20 to $17.80 from the prior range of $17 to $17.60, and its EPS estimate to the range of $15.85 to $16.45 from prior forecast range of $15.65 to $16.25. However, the company reaffirmed its revenue growth outlook of 9% and operating margin estimate of about 7.9%.

FedEx Q1 2019 Earnings Infographics

Among FedEx’s rivals, United Parcel Service (UPS) reported an 8.2% increase in its second-quarter earnings to $1.71 per share, exceeding Wall Street estimates. Revenue increased by 9.6% helped by growth across all segments.

Experts believe that FedEx and UPS would be affected by Amazon’s (AMZN) venture into the delivery space. Shares of FedEx opened higher but turned negative in the mid-afternoon. However, the stock bounced back by the time of market close and ended the day gaining few cents. The shares ended Monday’s regular session up 0.11% at $255.73 on the NYSE.

Tags: NYSE
Related Post