FedEx once again whittled down its fiscal 2025 profit expectations as the delivery heavyweight's third-quarter earnings came in slightly below analyst expectations late Thursday.
The company announced that Q3 EPS grew 17% to $4.51 while sales totaled $22.2 billion, increasing around 2% compared to a year ago. Analyst consensus had earnings of $4.56 a share and revenue coming in at $21.87 billion.
FedEx also revised its fiscal 2025 profit forecast to between $18 and $18.60 per share. In December, FedEx had revised fiscal 2025 revenue and earnings forecasts, expecting approximately flat revenue, compared to the prior forecast of a low single-digit percentage increase. The company trimmed expectations for its adjusted EPS to between $19 and $20 per share, compared to the prior forecast of $20 to $21 per share.
Analyst consensus currently pegs FedEx fiscal 2025 EPS growing 6% to $18.93 with revenue coming in at $87.59 billion, nearly flat compared to fiscal 2024.
Chief Financial Officer John Dietrich said in Thursday's release that the company's decision to revise its earnings outlook "reflects weakness in the U.S. industrial economy, but we remain confident in executing transformation initiatives to drive stockholder value."
FedEx: Cost Cutting Mode
At the end of fiscal Q2 in late December, FedEx announced intentions to separate FedEx Freight, creating a separate publicly traded company in about 18 months. FedEx has implemented several cost-cutting initiatives in recent months, including combining its ground, air and other operations in a single company. The goal is to reduce costs by $4 billion before the end of its current fiscal year, ending in May.
Morgan Stanley analyst Ravi Shanker in early March wrote that it is an "important time for the Parcel space as a whole, and FDX in particular, with structural question surrounding the growth/earnings power of the business."
"The stock has seesawed around earnings in recent quarters though we go into this print at a more reasonable starting point," Shanker added. The firm remains underweight on FDX with a 200 price target.
On Tuesday, Citi analysts lowered their price target on FedEx stock to 317 from 347, keeping a buy rating on the shares. The analysts wrote that based on conversations with investors, the big debate was over whether FedEx would further lower its fiscal 2025 earnings outlook.
The firm added that investors seem fearful of the potential impact of tariffs and increasingly concerned about downside risk to consumers and industrial activity.
FedEx Stock
FedEx stock dropped 6.4% to 230.53 during stock market action on Friday. FDX ended Thursday's regular session down 0.4% to 246.25. FDX enters Friday down more than 6% in March and is trading below both its 200-day and 50-day moving averages.
In September, the stock gapped down sharply on Sept. 20, after reporting that cost cuts did not offset weakness in lucrative priority services. Fiscal Q1 earnings missed expectations and FedEx also lowered its full-year earnings outlook.
FedEx stock has declined around 11% in 2025 while United Parcel Service has dropped nearly 7%. Collectively, the six stocks in the IBD-tracked Transport-Air Freight industry group are down 9.5% on the year.
FedEx stock has a 21-day average true range of 2.55%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below. UPS stock has a 21-day average true range of 1.89%.
FedEx stock has a 30 Composite Rating out of a best-possible 99. Shares also have a 28 Relative Strength Rating and a 52 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
AI Is Fueling A 'Nuclear Renaissance.' Bill Gates And Jeff Bezos Are In The Mix.
The Lithium Price Cycle Has Bottomed. What To Expect Next For These Stocks.
Market Firms As Trump Sees 'Flexibility'; Five Stocks Near Buy Points
