FedEx posted lower-than-expected quarterly earnings as results at its FedEx Ground and FedEx Freight units missed estimates, and it reiterated an outlook analysts consider conservative, sending its stock down nearly 5 per cent.
Both FedEx and main rival United Parcel Service are in the final days of their peak holiday season, which has boomed over the past decade due to the rise of e-commerce. Last year both companies were hit by a last-minute surge in online orders and bad weather, leaving an estimated two million packages undelivered on Christmas Eve.
The two companies have worked with online retailers in hopes of avoiding a repeat of last year. So far the plans appeared to be paying off.
FedEx reported net income of $616 million, or $2.14 per share, for the second quarter ended November 30th, up from $500 million, or $1.57 a share, a year earlier but below analyst expectations of $2.22 a share.
Revenue totaled $11.9 billion, below expectations of $11.99 billion, and was up in all of FedEx’s major business segments.
The company still expects earnings per share of $8.50 to $9 for the year ending May 31st. Analysts have forecast $9.14.
Analysts said results from FedEx Ground and trucking unit FedEx Freight, in particular fell short. The company’s full-year outlook was also seen as too conservative. – Reuters
