FedEx has done a decent job of delivering results that kept investors happy, but that streak has ended today. ❌
The transportation giant saw revenue fall about 3% YoY to $22.2 billion, missing the $22.36 billion consensus estimate. Its adjusted earnings per share of $3.99 also fell short of the $4.19 expected.
Given that consumer demand remains challenged, the company has focused on cutting costs and “right-sizing” operations for the current environment. It’s seen two consecutive quarters of operating income growth and margin expansion, even as revenues fell. 🔺
CEO Raj Subramaniam says he’s confident in the strategy to make FedEx’s global network more flexible, efficient, and intelligent. He reiterated that the company continues to make progress through “an uncertain demand environment.”
With that said, the outlook for shipping demand remains cautious as lower pricing offset an uptick in volumes. Management now expects full-year revenue to fall in low single-digits YoY, down from its previously flat outlook. This generally jives with the vibe we’ve heard from retailers and other industries based on consumers’ spending on goods.
$FDX shares fell about 8% on the news. If this weakness continues, FedEx will likely buy the dip in its shares given its plans to repurchase an additional $1 billion of common stock during fiscal year 2024. However, the Stocktwits community is bearish on the stock and is seemingly looking elsewhere. 🤷
