‘Unprecedented’ Holiday Shipping Season
FedEx made a profit of $3.47 per share in Q3, which translates into a net income of $939 million. Last year, the shipping company earned $371 million, or $1.41 per share. Surveyed market analysts were expecting earnings per share (EPS) of $3.23.
In Q3, FedEx’s business sales exceeded the $20 billion mark for the first time ever. The delivery service company recorded $21.51 billion in business revenue to easily top the $19.97 billion expected from market analysts. Last year, the shipping business reported sales of $17.49 billion.
“As reflected in this quarter’s results, continued execution of our strategies is producing strong earnings growth and margin improvement across our company. We expect demand for our unmatched e-commerce and international express solutions to remain very high for the foreseeable future,” said Frederick Smith, chairman and CEO of the business.
As far as the business outlook is concerned, FedEx is projecting to earn between $16.80 per share and $17.40 per share. The company also increased the budget for capital expenditures (CapEx) to $5.7 billion “due to changes in the timing of aircraft payments and the acceleration of FedEx Ground capacity expansion initiatives.”
FedEx stock soared around 4% in extended trading hours on better-than-expected results.
The shipping business said it recorded “strong volume growth “ in the US, with the FedEx CFO Michael Lenz noting an “unprecedented peak season.” However, the delivery service company is forecasting a hit of $350 million due to severe winter weather witnessed in February.
Winter storms “significantly impaired operations” at some of the company’s biggest operating hubs, namely Memphis, Indianapolis, and North Texas.
Earlier this month, FedEx announced it will ship COVID-19 vaccines produced by Johnson & Johnson. The delivery service business has already shipped millions of COVID-19 vaccines and is preparing to ship even higher volumes going forward.
“As vaccine production ramps up and more vaccines are approved, we expect to see a significant uptick in COVID-19 vaccine and supply kit volume moving through our network,” president and CEO for FedEx Express, Don Colleran, said.
Startup Savant reported that the shipping company is aiming to be carbon neutral by 2040. Going forward, the shipping business committed $2 billion to buying electric vehicles, sustainable energy, and carbon sequestration.
Delivery service company FedEx reported higher-than-expected profit and sales for its Q3 after witnessing strong volume growth during the holiday shipping season.
About the Author
Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.