FedEx Shares Rise on Solid Q2 Results

FedEx Corporation logo
FedEx Corporation logo

FedEx Corp. (NYSE: FDX) reported second-quarter fiscal 2013 results before markets opened this morning. The package delivery service reported diluted earnings per share (EPS) of $1.39 on revenues of $11.1 billion. In the same period a year ago, FedEx reported EPS of $1.57 on revenue of $10.6 billion. This morning's results compare to the Thomson Reuters consensus estimates for EPS of $1.41 and $10.84 billion in revenue.

FedEx said that Hurricane Sandy cost the company approximately $0.11 a share in earnings "due to reduced shipment volumes and incremental operating costs."

The company's CEO said:

Operating income for the quarter improved at FedEx Freight and FedEx Ground due to increased volumes and higher yields, while persistent weakness in the global economy and increased demand for lower-yielding international services limited profits at FedEx Express. Earnings also were negatively impacted by disruptions caused by Superstorm Sandy. We are hard at work on another record-setting holiday shipping season, driven by the continued growth of e-commerce.

The company's outlook for the third quarter projected EPS of $1.25 to $1.45, compared with the current consensus estimate of $1.45. For the full fiscal year, the company reaffirmed its adjusted EPS forecast of $6.20 to $6.60 a share. The consensus estimate calls for EPS of $6.39.

The biggest impact on earnings comes from the company's already announced voluntary employee buyout program, which FedEx expects to cost the firm $1.09 to $1.29 per share in the fourth quarter.

FedEx also noted that domestic average daily package volume dropped by 2% in the quarter, while domestic revenue per package rose by 1%. An anticipated boom in holiday package deliveries could provide a much needed jolt to those numbers.

Shares are up 1.3% in premarket trading this morning, at $93.60 in a 52-week range of $80.91 to $97.19. Thomson Reuters had a consensus analyst price target of around $104.70 before today's results were announced.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Earnings, Services, Transportation Tagged: FDX