FedEx Corporation Q4 Results Miss Estimates; Stock Falls

The shares of FedEx are trading lower after reporting financial results that missed the consensus estimates for the fourth quarter ended May 31. The stock price of the company dropped 2.75% to $177.24 per share at the time of this writing, around 11:01 AM in New York.

FedEx financial results

FedEx reported that its adjusted earnings were $2.66 per diluted share for the fourth quarter, lower than the $2.68 per share expected by Wall Street analysts. During the same period a year ago, the company recorded $2.54 in earnings per share.

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The company reported a loss of $3.16 per diluted share without adjustments for the fourth quarter compared to a profit of $2.62 per diluted share a year earlier.

Fed Ex explained that its quarterly consolidated earnings were adjusted for previously announced changes in pension accounting ($4.88 per diluted share), aircraft impairments ($0.62 per diluted share), a legal reserve increase ($0.47 per diluted share) and changes in segment reporting (favorable $0.15 per diluted share).

During the quarter, FedEx achieved revenue of $12.1 billion, up from $11.84 billion last year. Its revenue also missed the consensus estimate of $12.31 billion. Its operating income was $1.28 billion, and operating margin was 10.5%

FedEx Express segment generated revenue of $6.70 billion; FeEx Ground achieved $3.57 billion, and FedEx Freight posted $1.57 billion.

For fiscal 2015, FedEx reported adjusted earnings of $8.95 per share on $47.5 billion in revenue. Its operating income was $4.26 billion, and operating margin was 9%.

FedEx Chairman and CEO Frederick W. Smith commented, “Fiscal 2015 was a transformative year for FedEx with outstanding financial results driving expanded long-term value for shareowners.”

FedEx business outlook

FedEx estimated that it would be able to achieve earnings in the range of $10.60 to $11.10 per diluted share for fiscal 2016. The company’s guidance was based on its assumption of a continued moderate economic growth. It does not include operating results or costs related to TNT Express. The company expected its capital to be around $4.6 billion.

“We expect strong earnings growth in fiscal 2016 as we continue to focus on improving performance and successfully executing our profit improvement initiatives,” said FedEx CFO Alan B. Graf.