FILE PHOTO: A FedEx truck is driven through downtown in Los Angeles, California, U.S., July 22, 2019. REUTERS/Mike Blake/File Photo
June 24, 2021
LOS ANGELES (Reuters) -U.S. delivery firm FedEx Corp on Thursday reported a slightly higher than expected increase in quarterly profit and revenue, but shares shed 4.1% as investors fretted over how the company will grow after the business-boosting pandemic eases.
Shares in the Memphis-based company fell $12.31 to $291.38 in extended trading, after it forecast fiscal 2022 earnings, excluding some items, of $18.90 to $19.90 per share – below analysts’ average estimate $20.37, according to Refinitiv data.
The stock had finished the session up roughly 150% from March 1, 2020 – some two weeks before U.S. states and jurisdictions began closing businesses to curb the spread of the coronavirus.
FedEx founder and CEO Fred Smith said on a conference call that he expects FedEx margins to continue to grow this year, but that operations are being crimped by an inability to find enough workers.
Fiscal fourth quarter adjusted net income at FedEx rose to $1.36 billion, or $5.01 per share, from $663 million, or $2.53 per share, a year earlier. Pandemic-fueled demand for e-commerce services supported higher fees and robust volumes contributed to cost savings.
Revenue increased 30% to $22.6 billion.
Analysts expected fourth-quarter earnings of $4.99 per share and revenue of $21.5 billion, according to Refinitiv.
FedEx and rival United Parcel Service Inc raised rates and added surcharges as retailers clamored to deliver more packages.
Investors are eager to know how each company will continue to grow profits from Internet retail as the pandemic ebbs. They also want to see a strong rebound in lucrative overnight business shipments as workers return to offices.
Data from Convey Inc shows FedEx lags UPS and the U.S. Postal Service when it comes to on-time deliveries.
FedEx recently suspended freight shipping for roughly 1,400 customers to help relieve pressure on its network – which has been running at near full tilt for much of the pandemic.
(Reporting by Lisa Baertlein in Los Angeles, Editing by Alistair Bell and Richard Pullin)