After a rough stint of earnings reports last year, FedEx finally delivered some positive news for investors. Although it did lower the bar quite a bit beforehand, at least it beat those reduced expectations. 🤷
Its fiscal third-quarter earnings per share (EPS) of $3.41 beat the $2.73 expected. However, revenues of $22.17 billion missed the $22.74 billion analyst forecast.
Like last year, the company continues raising shipping rates wherever possible to offset lower volumes. It increased them by an average of 6.9% in January, hoping its revenue per shipment can continue improving. That figure rose by 11% in its fiscal third quarter. 🔺
Meanwhile, the company’s cost-cutting efforts bore fruit last quarter, helping its profits beat expectations. Executives continue focusing on efficiency, laying off 10% of its officers and directors last month. They’re also assessing all other measures to bring costs in, including cutting flights and grounding planes, reducing office space, and adjusting the Ground unit in pick-up and delivery.
As a result, the company raised its full-year fiscal-2023 EPS estimate to $14.60 to $15.20, up from its prior forecast of $13.00 to $14.00. Wall Street expected $13.56, so this upbeat outlook is a pleasant surprise. 🎁
As the company (and many others) have been saying, they remain cautious on the demand side of the equation. Inflation, an uncertain macroeconomic environment, and changing consumer behavior have most companies, especially retailers bracing for a slow 2023. ⚠️
That said, investors are happy to see profitability improve in this environment. As a result, $FDX shares rallied another 12% after hours. 🛫