FedEx Operating Margins Retreat in Latest Quarter
December 20 2016 - 5:34PM
Dow Jones News
By Ezequiel Minaya
Package delivery giant FedEx Corp. saw operating margins slide
in its latest quarter, offsetting gains on expanding volumes tied
to an e-commerce boom.
Operating margin for the quarter ended Nov. 30 retreated to 7.8%
from 9.1% during the same period a year earlier. Acquisition costs
linked to the takeover of TNT Express NV in May, among other items,
hurt earnings at the Memphis, Tenn., company.
FedEx posted profit on an adjusted basis of $2.80 per share for
its second quarter, up from $2.58 a year earlier but below a
forecast of $2.90 by analysts surveyed by Thomson Reuters.
Shares of the company, up 35% over the past 12 months, fell 2.7%
after-hours to $193.49.
Analysts are eager to gauge how FedEx and other carriers handle
the surprise surge in holiday shipping volumes. The increase means
better revenue for the holiday quarter but creates pressure on
FedEx and other rivals to keep pace.
"In the current peak shipping season, reports suggest that both
FedEx and UPS are struggling to keep up with demand," said analysts
at Cowen and Company in a recent client note. "As e-commerce
continues to grow, there will be plenty of packages for FedEx, UPS
and USPS to grow their businesses."
Revenue for the latest quarter rose 19.2% to $14.9 billion,
thanks in part to the new addition of TNT Express. FedEx bought the
company for nearly $5 billion. Analysts had expected $14.92
billion.
For the November quarter, FedEx reported a profit of $700
million, or $2.59 a share, up from $691 million, or $2.44 a share,
a year ago.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
December 20, 2016 17:19 ET (22:19 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
FedEx (NYSE:FDX)
Historical Stock Chart
From Aug 2024 to Sep 2024
FedEx (NYSE:FDX)
Historical Stock Chart
From Sep 2023 to Sep 2024