FedEx (FDX) Tops Q4 EPS by 8c, Offers FY20 Outlook

June 25, 2019 4:06 PM EDT

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FedEx (NYSE: FDX) reported Q4 EPS of $5.01, $0.08 better than the analyst estimate of $4.93. Revenue for the quarter came in at $17.8 billion versus the consensus estimate of $17.88 billion.


During fiscal 2020, operating income at FedEx Ground and FedEx Freight is expected to increase due to higher revenues. At FedEx Express, macroeconomic weakness and trade uncertainty, continued mix shift to lower-yielding services and a strategic decision to not renew a customer contract will negatively impact operating income.

FedEx is unable to forecast the fiscal 2020 year-end MTM retirement plan accounting adjustment. As a result, the company is unable to provide a fiscal 2020 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.

For fiscal 2020, FedEx forecasts:

  • A low-single-digit percentage point increase in diluted earnings per share prior to the year-end MTM retirement plan accounting adjustment compared with fiscal 2019’s earnings of $13.25 per diluted share prior to the year-end MTM retirement plan accounting adjustment;
  • A mid-single-digit percentage point decline in diluted earnings per share prior to the year-end MTM retirement plan accounting adjustment and excluding estimated TNT Express integration expenses compared with fiscal 2019’s adjusted earnings of $15.52 per diluted share;
  • A higher ETR in the range of 23-25% prior to the year-end MTM retirement plan accounting adjustment; and
  • Capital spending of $5.9 billion.

Total TNT Express integration program expenses through fiscal 2021 are now estimated to be approximately $1.7 billion, of which $350 million is expected to be incurred in fiscal 2020.

These forecasts assume moderate U.S. economic growth, the company’s current fuel price expectations, no further weakening in international economic conditions from the company’s current forecast and no additional adverse developments in international trade policies and relations. FedEx’s ETR and earnings per share outlooks are based on the company’s current interpretations of the Tax Cuts and Jobs Act (TCJA) and related regulations and guidance, and are subject to change based on future guidance, as well as FedEx’s ability to defend its interpretations.

“Our fiscal 2020 performance is being negatively affected by continued weakness in global trade and industrial production, especially at FedEx Express,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “While we are adjusting our costs to mitigate revenue weakness and market shifts, we will continue to invest in areas that expand our capabilities, improve our long-term efficiencies and reduce our cost to serve.”

For earnings history and earnings-related data on FedEx (FDX) click here.

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