FedEx Reported Lower Than Expected Third-Quarter Results
Mar 18, 2022 By MarketDepth
FedEx (NYSE: FDX) reported lower than expected third-quarter results Thursday, amid ongoing labor shortages and Omicron variant outbreak. Consequently, the company’s stock tumbled 3.1% in premarket trading.
Higher Revenue, Higher Costs
The American multinational conglomerate holding company reported earnings of USD4.59 per share, compared to the expected USD4.65 a share. However, revenue amounted to USD23.60 Billion, higher than analysts anticipated USD23.33 Billion.
“The continued execution of our strategies drove improved third quarter results. I am proud of our team members around the world, who are constantly proving their resilience amidst a rapidly evolving global environment. FedEx is supporting our team members and others affected by the ongoing conflict in Ukraine as we hope to soon see a return to peace.”Frederick W. Smith, FedEx Corp. chairman and chief executive officer.
Meanwhile, third quarter operating income was on an upward trend as a perk of higher revenue per shipment and a net fuel benefit in all transportation segments. Furthermore, the quarter’s results also improved amid the lower variable compensation expense and less harsh winter.
“We successfully executed during the holiday peak season, resulting in record December operating income. Our strong quarterly operating income increase was dampened by the surge of the Omicron variant which caused disruptions to our networks and diminished customer demand in January and into February. We remain focused on revenue quality and operational efficiency initiatives to mitigate inflationary pressures and drive earnings improvement.”Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer