FedEx Reports Strong Fourth Quarter Earnings; Shares Slip 4.4%


Global delivery services giant FedEx Corporation (FDX) has reported strong fourth quarter and annual results on the back of volume growth and disciplined revenue and portfolio management. The growth, however, was hampered by higher labor costs and variable expenses. Shares of the company slipped 4.4% in the extended trading session on Thursday. (See FedEx stock chart on TipRanks)

Adjusted earnings for the quarter almost doubled to $5.01 per share, beating analysts’ estimates of $4.99 per share. Total revenue jumped 30% to $22.56 billion and surpassed the Street’s estimates of $21.51 billion.

For the full year 2021, adjusted earnings grew 91.3% to $18.17 per share, and total revenue increased 21.3% to $83.96 billion.

On an annual basis, FedEx Express, FedEx Ground, and FedEx Freight segments grew 18%, 34%, and 10%, respectively.

Chairman and CEO of FDX Frederick W. Smith said, “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. I am optimistic about the future of FedEx as we continue to innovate for our customers and meet strong demand for our global transportation network and capabilities.”

For the full year 2022, the company projects adjusted earnings to fall in the range of $20.50 to $21.50 per share, while consensus estimates are pegged at $20.37 per share.

The company forecasts FY22 revenues to exceed $90 billion and capital expenditure to be $7.2 billion.

Barclays analyst Brandon Oglenski recently reiterated a Buy rating on the stock and lifted the price target to $375 from $360 (23.8% upside potential).

Oglenski expected strong results and a ‘favorable’ outlook to lift FedEx’s shares post-earnings. Additionally, the analyst believes that United Parcel Services’ (UPS) commitment to improving the pricing and customer mix in the U.S. package business, along with a lower capital spending outlook, signals “favorable market dynamics for the more growth-oriented FedEx.”

FedEx has a Strong Buy consensus rating based on 14 Buys and 2 Holds. The average FedEx analyst price target of $348.50 implies 15% upside potential from current levels. Shares have gained 123.1% over the past year.

TipRanks data shows that financial blogger opinions are 88% Bullish on FDX compared with the sector average of 72%.

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