FEDEX earnings disappoint

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By Jacob Maslow

FedEx Critical Delivery
FedEx making a premium delivery

Federal Express (FEDEX) reported lower than expected earnings on Wednesday, December 17th. The lower results were due to FEDEX Ground and FEDEX Freight missing their estimates. FEDEX and United Parcel Service (UPS) are winding down their days of the holiday shipping season, which has been even more hectic due in part to the increase in e-commerce. Each encountered issues getting holiday packages delivered in 2013 due to in climate weather, and a number of last minute on line orders which left over two million packages not delivered on Christmas Eve. On a conference call with analysts today, FEDEX executives identified that the left over cargo shipments backed up over the past three months were due to the labor issues on the West Coast ports creating inventory shortages.

FEDEX income was reported at $616 million or $2.14 per share versus $500 million or $1.57 a year ago. Analysts had expected $2.22 per share. Revenue increased to 11.9 billion, yet below the expectation of $11.99 billion. FEDEX package volume jumped by five percent for the international business, and was up one percent in the international priority business. FEDEX credits their ongoing profit improvement plan, falling gasoline prices, reduced pension plan expenditures, and lower aircraft maintenance costs.

Per FEDEX, expected earnings per share will come in at $8.50 to $9.00 for the year ending May 31st. Many analysts had expected earnings per share at $9.14, and noted that FEDEX’s full year outlook was too conservative. FEDEX have dropped as much as six and one half percent today to $163 per share. FEDEX stock price per share 52 week range has reached a high of $183 and a low of $128.

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