Fedex earnings report contains few surprises
Analysts noted that the company’s international business was hurt by the strong dollar and falling fuel surcharges
FedEx Corp. today reported adjusted earnings of $2.66 per diluted share for the fourth quarter ended May 31, compared to adjusted earnings of $2.54 per diluted share a year ago, thereby falling short of what many market analysts expected.
For fiscal 2015, adjusted earnings were $8.95 per diluted share, compared to $7.05 per diluted share a year ago.
Without adjustments, FedEx reported a loss of $3.16 per diluted share for the fourth quarter compared to a profit of $2.62 per diluted share a year ago, and earnings of $3.65 per diluted share for the full fiscal year, compared to $7.48 per diluted share last year.
“Fedex pretty much telegraphed to the investment world everything in advance except the big miss on the top line revenue,” said Jerry Hempstead, president of Hempstead Consulting in Orlando. “So today the Street will punish their stock.”
Other business analysts noted that the company’s international business was hurt by the strong dollar and falling fuel surcharges.
According to Hempstead, the company has managed to make some financial adjustments to its balance sheet and network to better position itself for the future.
“Yields are good and improving meaning the shipper is paying more for the services they buy,” he said.
Fedex can also repair their top line, said Hempstead, by “turning their sales force loose” upon UPS and DHL.
“Of late they have been reluctant to push too hard, but Fedex is a very disciplined sales organization and can make any number they set their mind to,” said Hempstead.
