FedEx Q1 Profit Misses Views, Shares Drop

(FDX) on Wednesday reported fiscal first-quarter net income of $692 million. EPS in Q116 are expected to come in at $2.46, a growth rate of 17.14% from $2.10 per share a year earlier.

How The Walt Disney Firm dominated Wall Street through eye catching trend? FedEx expects its adjusted earnings for fiscal 2016 to grow to $10.60-11.10 per diluted share, driven by an increase in base pricing and continued benefits from profit improvement programs such as aircraft replacements (the guidance does not include any impact from the TNT acquisition).

Ground’s operating income slipped 1% to $537 million, while revenue shot up 29% to $3.83 billion in part from the addition of GENCO. FedEx expects its capital spending to be approximately $4.6 billion for fiscal 2016.

The Memphis-based company also lowered its full-year earnings forecast, citing modest economic growth and higher-than-expected operating costs plus self-insurance reserves at its ground domestic U.S. package unit. Revenues during the quarter totaled $US12.3 billion, and $US12.26 billion was expected. Moreover, revenue per LTL shipment fell by 1% in the quarter as lower fuel surcharges (energy prices have fallen) proved a drag on growth.

At the end of the day, there’s just nothing compelling about FedEx stock after its recent earnings report, and perhaps the Federal Reserve should take these lackluster earnings and expectations into account when its “data-driven” decision on rates is made tomorrow.

In premarket trading about an hour before the opening bell, FedEx shares were down $3.85, or 2.5 per cent, to $150.15.

FedEx shares fell $4.37, or 2.8 percent, to close at $149.63.

FedEx said Tuesday it will increase shipping rates an average of 4.9 percent effective Jan. 4. FedEx Services supplies FedEx’s other companies with information technology, advertising, sales, communications, customer service and specific other back office support.

The firm also recently announced a quarterly dividend, which will be paid on Thursday, October 1st.

FedEx is in the final year of a three-year $1.7 billion cost-cutting program primarily aimed at FedEx Express, the company’s airline business.

FedEx Corporation (NYSE:FDX) witnessed a decline in the market cap on Monday as its shares dropped 0.56% or 0.85 points. The Company offers its services through companies representing four business segments: FedEx Ground, FedEx Express, FedEx Freight and FedEx Services.

The company will also update fuel surcharge tables for FedEx Express and FedEx Ground and increase surcharges on shipments exceeding published maximum dimensions, effective Nov. 2. (FedEx Ground) is a provider of small-package ground delivery service.

The unauthorized package fee increase stemmed from the shipper seeing more of those types of packages, said Mike Glenn, president and CEO of FedEx Services, today during the company’s earnings call.