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Why FedEx Beat Analysts’ Earnings Estimates in Fiscal 4Q17

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FedEx’s fiscal 4Q17 earnings

On June 20, 2017, parcel delivery and logistics giant FedEx (FDX) announced its fiscal 4Q17 results. The company reported adjusted EPS (earnings per share) of $4.25, compared to $3.30 in fiscal 4Q16. On a YoY (year-over-year) basis, this represented a 29% rise. 

FedEx beat analysts’ consensus adjusted earnings estimate by 9.4%.

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FedEx stock price reaction

On June 21, 2017, FDX stock surged 1.6% to settle at $212.3. The company’s solid fiscal 4Q17 results drove its stock to a 52-week high of $212.3 on the same day. FedEx’s TNT Express acquisition and its improved revenue per shipment saw it achieve record revenue of $60.0 billion in fiscal 2017.

Investors should note that the financial results of companies such as FedEx and United Parcel Service (UPS) can give us a sense of broader global economic activity. Let’s go through the returns generated by these LTL (less than truckload) companies starting in 2017. 

Since January 1, 2017, FDX has returned 14%, compared to UPS’s -4.8% return. Let’s see how the company’s peers have fared during the same period:

  • H. Robinson Worldwide (CHRW) has returned -8.3%.
  • Expeditors International of Washington (EXPD) has returned 4.1%.
  • Riding on three major acquisitions in 2016, XPO Logistics (XPO) has returned a whopping 45.8%.
  • Leading LTL company Old Dominion Freight Line (ODFL) has returned 7.4%.

During the same timeframe, the SPDR S&P Transportation ETF (XTN) has returned -1.2%.

Fiscal 2018 earnings outlook

FedEx’s chief financial officer, Alan Graf, said on the company’s fiscal 4Q17 earnings call, “The earnings forecast before year-end mark-to-market pension accounting adjustments and excluding TNT integration and restructuring expenses was $13.20 to $14 per diluted share for FY ’18. This forecast includes estimated TNT intangible asset amortization expense of $65 million.”

In this series

In this series, we’ll cover FDX’s fiscal 4Q17 results on a segment-by-segment basis, including its operating margins. We’ll also see what analysts think about the company following its fiscal 2017 earnings results. If you want to know more on FedEx, visit Market Realist’s FedEx company overview.

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