The Gory Details of FedEx's Earnings Miss

Seth Jayson, The Motley Fool
Updated

FedEx (NYS: FDX) reported earnings on March 20. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Feb. 28 (Q3), FedEx beat slightly on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped significantly.


Margins dropped across the board.

Revenue details
 FedEx reported revenue of $11.00 billion. The 20 analysts polled by S&P Capital IQ wanted to see revenue of $10.86 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $1.23. The 27 earnings estimates compiled by S&P Capital IQ predicted $1.38 per share. Non-GAAP EPS of $1.23 for Q3 were 21% lower than the prior-year quarter's $1.55 per share. GAAP EPS of $1.13 for Q3 were 32% lower than the prior-year quarter's $1.65 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 24.2%, 50 basis points worse than the prior-year quarter. Operating margin was 5.8%, 130 basis points worse than the prior-year quarter. Net margin was 3.3%, 160 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $11.48 billion. On the bottom line, the average EPS estimate is $1.99.

Next year's average estimate for revenue is $44.31 billion. The average EPS estimate is $6.06.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,122 members out of 2,337 rating the stock outperform, and 215 members rating it underperform. Among 737 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 698 give FedEx a green thumbs-up, and 39 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on FedEx is outperform, with an average price target of $109.00.

Looking for alternatives to FedEx? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

The article The Gory Details of FedEx's Earnings Miss originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends FedEx and recommends the following options:Long Jan 2015 $65 Calls on FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement