UPDATE: Fedex Corp. (FDX) Misses Q3 EPS by 16c; Issues Light Q4, FY13 Outlook

March 20, 2013 7:31 AM EDT
(Updated - March 20, 2013 7:43 AM EDT)

Fedex Corp. (NYSE: FDX) reported Q3 non-GAAP EPS of $1.23, versus the analyst estimate of $1.39. Revenue for the quarter came in at $11 billion versus the consensus estimate of $10.85 billion.

Operating margin eased 2.3 points to 5.5 percent.

FedEx Express revs rose 2 percent to $6.7 billion, while operating income fell 66 percent to $118 million. FedEx Ground revs improved 11 percent to $2.75 billion and operating income saw a modest boost to $467 million. FedEx Freight revs rose to $1.24 billion with operating income rising from $1 million up to $4 million. Freight margins also turned positive in the latest quarter.

The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services,” commented chairman and CEO Frederick Smith. "In response, beginning April 1st, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks. We are currently assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft."

Looking ahead, Fedex sees Q4 2013 EPS of $1.90 to $2.10, versus the consensus of $2.13 and $1.99 reported in the same period last year. The company also sees FY2013 adjusted EPS of $6.00 to $6.20, versus the consensus of $6.35.

The company also added 10 million shares to its buyback program, augmenting the 188,000 left from its previous authorization.

FedEx is lower in early trading Wednesday.

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


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