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FedEx (FDX) to Report Q4 Earnings: What's in the Offing?

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FedEx Corporation FDX is set to release fourth-quarter fiscal 2022 (ended May 31, 2022) results on Jun 23, after market close.

The Zacks Consensus Estimate for earnings in the fiscal fourth quarter has been revised 0.88% upward in the past 60 days. FDX has a disappointing surprise record with its earnings per share outperforming the Zacks Consensus Estimate in only one of the preceding four quarters, missing the mark in the other three. The average miss is 0.11%.

Against this backdrop, let’s look into the factors that are likely to have impacted FedEx’s fourth-quarter fiscal 2022 performance.

Similar to the last few quarters, high transportation and labor costs are likely to have hurt FedEx’s fourth-quarter fiscal 2022 performance. Costs are likely to have been high due to supply-chain disruptions.

Specifically, higher operating expenses pertaining to labor market woes and wage pressures as well as increased costs related to network expansion are expected to have dented the bottom-line performance in the to-be-reported fiscal quarter. Due to high costs, the Zacks Consensus Estimate for operating income at FedEx’s Ground unit indicates a 7.8% decline from the year-ago fiscal quarter’s reported figure.

However, favorable pricing and a healthy demand scenario are likely to have aided the top-line performance. Moreover, the penchant for online shopping remains strong even with economies reopening and people going out for work.

Therefore, e-commerce demand should have remained strong, driving the top line in the to-be-reported fiscal quarter. The Ground unit, which handles e-commerce deliveries for many retailers, is expected to have benefited from higher residential delivery volume growth. The Zacks Consensus Estimate for Ground revenues in the fiscal fourth quarter suggests a 7% uptick from the year-ago fiscal quarter’s reported number.

Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for FedEx this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. However, that is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: FedEx has an Earnings ESP of -2.30% as the Most Accurate Estimate is pegged at $6.70, lower than the Zacks Consensus Estimate of $6.86. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: FedEx currently carries a Zacks Rank #3.

Highlights of Q3 Earnings

FedEx's third-quarter fiscal 2022 (ended Feb 28, 2022) earnings (excluding 39 cents from non-recurring items) of $4.59 per share fell short of the Zacks Consensus Estimate of $4.69. The bottom line, however, increased 32.3% from the prior-year fiscal quarter’s reading.

Quarterly revenues for the fiscal quarter came in at $23,641 million. The top line exceeded the Zacks Consensus Estimate of $23,569.3 million and increased 9.91% from the year-earlier fiscal quarter’s actuals, with revenues rising at all its key segments.

Recap of Recent Results From the Industry

Below we present the latest quarterly results of United Parcel Service UPS and Air Transport Services ATSG, which belong to the same industry as FedEx.

UPS’ earnings (excluding 2 cents from non-recurring items) of $3.05 per share beat the Zacks Consensus Estimate of $2.87. The bottom line jumped 10.11% year over year with strong segmental performances.

Quarterly revenues of $24,378 million also outperformed the Zacks Consensus Estimate of $23,896 million. The top line improved 6.42% year over year, driven by favorable pricing and upbeat e-commerce demand.

Air Transport Services Group’s first-quarter 2022 earnings (excluding 1 cent from non-recurring items) of 56 cents per share surpassed the Zacks Consensus Estimate of 45 cents. The bottom line surged in excess of 100% year over year on the back of an impressive revenue performance. Revenues not only rose 29.2% year over year to $485.9 million but also surpassed the Zacks Consensus Estimate of $458.7 million.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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