FedEx Corp. (FDX) today reported the following consolidated results for the quarter ended May 31. Revenue: $22.6 billion vs. $21.49 billion expected and $17.36 billion. Adjusted earnings per share: $5.01 vs. $5.00 expected and $2.53
| Fiscal 2021 | Fiscal 2020 | |||
| As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
|
| Revenue | $22.6 billion | $22.6 billion | $17.4 billion | $17.4 billion |
| Operating income | $1.80 billion | $1.97 billion | $475 million | $907 million |
| Operating margin | 8.0% | 8.7% | 2.7% | 5.2% |
| Net income (loss) | $1.87 billion | $1.36 billion | ($334 million) | $663 million |
| Diluted EPS (loss) | $6.88 | $5.01 | ($1.28) | $2.53 |
For the full fiscal year, FedEx Corp. reported the following consolidated results (adjusted measures exclude the items listed below for the applicable fiscal year):
| Fiscal 2021 | Fiscal 2020 | |||
| As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
|
| Revenue | $84.0 billion | $84.0 billion | $69.2 billion | $69.2 billion |
| Operating income | $5.86 billion | $6.18 billion | $2.42 billion | $3.12 billion |
| Operating margin | 7.0% | 7.4% | 3.5% | 4.5% |
| Net income | $5.23 billion | $4.89 billion | $1.29 billion | $2.49 billion |
| Diluted EPS | $19.45 | $18.17 | $4.90 | $9.50 |
This year’s and last year’s quarterly and full-year consolidated results have been adjusted for:
| Impact per diluted share | Fiscal 2021 | Fiscal 2020 | ||
| Fourth Quarter | Full Year | Fourth Quarter | Full Year | |
| Mark-to-market (MTM) retirement plan accounting adjustments |
($3.44) | ($3.33) | $2.22 | $2.22 |
| Loss on debt extinguishment | 1.09 | 1.11 | – | – |
| TNT Express integration expenses | 0.18 | 0.60 | 0.18 | 0.80 |
| Business realignment costs | 0.30 | 0.33 | – | – |
| Goodwill and other asset impairment charges |
– | – | 1.40 | 1.58 |
Fourth Quarter Results
Fourth quarter operating results increased primarily due to volume growth and disciplined revenue and portfolio management. These factors were partially offset by costs to support strong demand, increased variable compensation expense, and higher labor rates.
Net results include a loss on debt extinguishment of $393 million ($297 million net of tax).
FedEx Express fourth quarter operating income more than doubled year over year, driven by exceptional growth in international export and U.S. domestic package services. Operating margin increased 260 basis points (an adjusted 340 basis points; adjusted measures exclude the items listed below for the applicable fiscal year), as improved network optimization and asset utilization enabled profit growth from record fourth quarter volume.
FedEx Ground reported record earnings for the quarter and revenue growth of 27%. The revenue increase was primarily driven by strong growth in business-to-business shipments and a 14% rise in revenue per package. Operating margin improved 310 basis points to 13.6% due to strong revenue growth and slower growth in purchased transportation expenses, aided by a higher mix of business-to-business shipments and benefits from dynamic route optimization technology. This improvement was partially offset by higher expenses driven by constrained labor availability.
FedEx Freight reported record earnings and operating margin of 16.1% for the quarter, as average daily shipments grew 30% and revenue per shipment increased 6%. Operating results improved primarily due to the continued focus on revenue quality and profitable growth.
Outlook
FedEx is unable to forecast the fiscal 2022 mark-to-market (MTM) retirement plan accounting adjustments. As a result, FedEx is unable to provide a fiscal 2022 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.
For fiscal 2022, FedEx is forecasting:
- Earnings per diluted share of $18.90 to $19.90 before the MTM retirement plan accounting adjustments;
- Earnings per diluted share of $20.50 to $21.50 before the MTM retirement plan accounting adjustments and excluding estimated TNT Express integration expenses and costs associated with business realignment activities;
- ETR of approximately 24% prior to the MTM retirement plan accounting adjustments; and
- Capital spending of $7.2 billion, with continued investment in the key strategic priorities of e-commerce, operational excellence and efficiency. Strategic initiatives include accelerated capacity expansion, fleet and facility modernization, and increased automation.
CWEB Analyst’s have initiated a BUY Rating for FedEx Corp. (FDX). Reported $22.6 billion vs. $21.49 billion expected and $17.36 billion. Adjusted earnings per share: $5.01 vs. $5.00 expected and $2.53 . We believe the net Quarter will be even better due to high demand in shipping and post covid economy.
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