Here’s what FedEx Q4 earnings report tells us

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Jun 24, 2021
  • FedEx beats Wall Street estimates in the fiscal fourth quarter.
  • The delivery services company did not offer future guidance.
  • FedEx shares are 4% down in extended trading on Thursday.

FedEx Corp (NYSE: FDX) published its earnings report for the fiscal fourth quarter on Thursday that came in better than expected. The company attributed its hawkish performance to a COVID-19 driven boost in the U.S. and elsewhere.

“We continue to play an important role in global economic recovery and the delivery of COVID-19 vaccines and relief supplies throughout the U.S., Canada and more than 35 other countries,” said CEO Frederick Smith.

Financial performance

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FedEx reported $1.87 billion of net income in the fourth quarter that translates to $6.88 per share. In the comparable quarter of last year, it had posted $334 million of net loss, or $1.28 per share. On an adjusted basis, the delivery services company earned $5.01 per share. FedEx had topped market estimates in the prior quarter (Q3) as well.

FedEx generated $22.6 billion of revenue in Q4 – an increase from $17.04 billion last year. According to FactSet, experts had forecast $21.5 billion of revenue and $5.02 of earnings per share.

Full-year results and future outlook

For the full financial year, FedEx said its net income printed at $5.23 billion versus the year-ago figure of $1.29 billion. $84 billion of revenue in fiscal 2021 also increased from last year’s $69.2 billion. Both figures beat Wall Street estimates.  

FedEx refrained from giving its guidance for fiscal 2022 on Thursday, but CFO Michael Lenz expressed confidence that momentum will remain strong.

Gina Sanchez comments on CNBC’s “Closing Bell”

Commenting on the financial update, Chantico Global CEO Gina Sanchez said on CNBC’s “Closing Bell”:

“I think the market was looking for something different. And so much of it was already priced for FedEx. So, they were really running up against valuation issues. If you look forward, it’s not necessarily poorly valued, but there was just so much movement, kind of anticipating this number, that it was bound to correct with any disappointment.”

In separate news from the United States, Accenture also reported its quarterly financial results on Thursday.

Impact on the share price

FedEx shares were just under 4% down in after-hours trading on Thursday. Including the price action, the stock is now exchanging hands at $292 per share. In comparison, the Memphis-based company had started the year at $253 per share.

In early May 2020, FedEx had slipped to a low of $108 per share due to the COVID-19 restrictions. At the time of writing, the NYSE-listed company has a market cap of $80.58 billion and has a price to earnings ratio of 26.89.

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