Shares of FedEx (FDX 1.37%) were lower in pre-market trading on Wednesday after the company released its third-quarter 2020 results after market hours Tuesday.
For the quarter, the logistics giant took in revenue of $17.5 billion, slightly up from the $17 billion in Q3 2019. Non-GAAP (adjusted) net income fell considerably, by 53% to $371 million, with earnings per share (EPS) of $1.41.
Image source: FedEx.
That top-line figure comfortably beat the average analyst estimate of $16.9 billion. However, prognosticators following the stock were collectively expecting a per-share net profit of $1.43.
FedEx said its operating results slumped because of a weakened global economy, particularly due to the impacts of the coronavirus. The outbreak of the coronavirus gathered steam during the company's Q3. The company was also impacted by the loss of what it described as a "large customer." This almost certainly refers to Amazon.com, which has brought more of its logistics in-house.
On the subject of the coronavirus, FedEx has decided to suspend its full-year 2020 earnings guidance because of the pandemic. It did not say when it might later provide these estimates.
The company did strike a reassuring tone in its earnings release, saying that in order "[t]o mitigate these near-term headwinds and position the company for future earnings growth, we are attacking costs throughout the company."
It specifically mentioned the retirement of certain aircraft, continued consolidation of the massive TNT Express acquisition, and a reduction in residential delivery costs, among other measures.
Investors don't seem particularly reassured. FedEx, considered a top stock especially in the logistics sector, was off by more than 4% in pre-market trading Wednesday.
