So FedEx (NYSE: FDX) beat earnings. Big deal.

Fools, I don't mean to belittle FedEx's accomplishments in a year that was obviously rough for anyone who uses -- you know -- fuel. While today's surprise decision by the International Energy Agency to unleash 60 million barrels of crude upon a price-shocked market has given a reprieve to heavy users like Delta (NYSE: DAL) and United Continental (NYSE: UAL) -- sending their shares up 4% and 5%, respectively -- as recently as April the picture looked a lot different. Year over year, April 2011 jetfuel prices had risen 31%, putting the pinch on everyone involved in moving people (and packages) through the air.

This crimped profits at FedEx in particular, making the company's fiscal 2011 turnaround just that much more impressive:

  • Sales up 13% versus fiscal 2010.
  • Operating profit up 19%.
  • Net income up 23%, with adjusted per-share profits rising 30% to $4.90.

And the fact that FedEx now tells us it's going to grow earnings another 35% in fiscal 2012, to $6.60 per share in profit? Great news -- but still not good enough to get me to buy the stock.

Call me a skeptic, call me a Fool, but no matter how good the headlines read, when I get a copy of FedEx's earnings in hand, I always head straight to the cash flow statement to see how the business is really doing. Sadly, the news here is not good. Despite reporting $1.45 billion in profit last year, FedEx showed a mere $607 million in actual free cash flow generated for the period. At today's prices, therefore, a share of FedEx will set you back about 48 years' worth of actual cash profit -- and it gets worse.

Last year, FedEx laid out $3.4 billion on capital expenditures (the bulk of which went to "aircraft and related equipment"). This year, management promises to spend $4.2 billion on capital expenditures -- a 24% increase. Boeing (NYSE: BA) will probably applaud the extra spending on airplanes. I do not.

Foolish takeaway
Make no mistake: FedEx is an admirable enterprise. Alongside UPS (NYSE: UPS), it's one-half of a global duopoly on fast transport. It's even better than UPS in one respect, that being its nearly clean balance sheet (versus UPS' $6.7 billion net debt). But with analysts predicting 16% long-term earnings growth, I just don't see the sense in paying 48 times free cash flow, or even 22 times earnings for FedEx.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.