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Investors Business Daily
Investors Business Daily
Business
ALAN R. ELLIOTT

FedEx Fades After Earnings, Revenue Miss Targets

Shipping heavyweight FedEx fiscal Q2 earnings and revenue results stopped short of expectations after Tuesday's close. FDX stock fell hard in late trade.

FedEx reported EPS of $3.99, with revenue of $22.2 billion. That marked a 25% gain, short of the 32% increase, to $4.19 a share, expected by analysts polled by FactSet. The revenue target was for a 1.9% gain to $$22.36 billion.

Cost cutting measures and possibly cheaper fuel helped boost the shipping leader's operating margin to 6.4%, up from 5.3% a year ago.

FedEx earnings rose 32% in its first quarter, the company's first year-over-year increase in five periods. Revenue has not increased since the August quarter of last year.

Going into Tuesday's report, analyst consensus projected almost a 22% earnings gain for fiscal 2024. Revenue was expected to slip 1%. Management held its full-year earnings outlook steady, and narrowly trimmed its revenue guidance on Tuesday.

FedEx shares had mustered a 62% gain for the year through Tuesday's close. The stock was in a buy zone, after breaking out of a cup base on Dec. 8. Shares fell more than 7% in afterhours trading, threatening to snuff the stock's breakout.

Rival UPS stock pared losses to less than 2% in late trading. The stock is down 7% since the start of the year, although it has rebounded 21% since late October. Its earnings are in a three-quarter slump, with revenue down in the four quarters through October.

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