FedEx Corporation (FDX) Tanks after 2Q Earnings Disappoint

FedEx Corporation (FDX) Tanks after 2Q Earnings Disappoint
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FedEx Corporation (NYSE:FDX) plummeted after reporting quarterly earnings the disappointed investors. Its stock declined more than 4% to $166.97 per share at the time of this writing, around 3:35 in the afternoon in New York today.

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FedEx Corporation financial results

For the second quarter, FedEx Corporation reported that its earnings rose 36% to $2.14 per diluted share compared with $1.57 per share in the year-ago quarter. Its revenue was $11.9 billion, an increase of 5% from $11.4 billion in the same period last year.

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In a statement, Frederick Smith, chairman, president and CEO of FedEx Corporation (NYSE:FDX) said, “FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments.”

Although the shipping company achieved a strong growth, its financial results did not meet investors’ expectations. Wall Street analysts expected FedEx Corporation (NYSE:FDX) to report $2.22 in earnings per share on $11.97 billion in revenue for the quarter.

FedEx Corporation (NYSE:FDX) said its operating income increased 22% to $1.01 billion from $827 million last year. Its operating margin went up from 7.3% to 8.5%.  Its net income was $616 million, up 23% from $500 million a year ago.

According to the company, its operating income and margin climbed due to higher volumes and base yields from its three transportation segments.  FedEx Corporation (NYSE:FDX) generated revenues of $7.02 billion from FedEx Express, $3.06 billion from FedEx Ground and $1.59 billion from FedEx Freight.

FedEx Corporation (NYSE:FDX) said its financial results for the quarter included benefits from its profit improvement programs, lower pension expense and a slightly positive net impact from fuel. The company said those benefits were partially offset by higher aircraft maintenance expense.

The company plans to hire 50,000 seasonal workers and to invest in its ground-shipping network to ensure a timely delivery of packages. FedEx Coporation (NYSE:FDX) estimated its deliveries to increase 8.8%

Fiscal 2015 earnings guidance

FedEx Corporation (NYSE:FDX) maintained its fiscal 2015 earnings guidance of $8.50 to $9.00 per diluted share and a $4.2 billion in capital spending.

The company is anticipating a continued moderate economic growth and a modest net benefit from fuel.

Wall Street analysts polled by FactSet forecasted that FedEx Corporation (NYSE:FDX) will deliver $9.11 in earnings per share for the fiscal 2015.

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Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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  1. Never ceases to amaze me how the “wall street experts” can PREDICT something to happen and when it doesn’t they punish the stock. Reality never seems to rear it’s head with those folks. And yet this company did well by any measure you use, but the reality is not good enough? What a joke. Companies used to be judged on performance not on what somebody wanted them to do…experts in one thing only, ripping others off of their money.

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