The 10-second takeaway
For the quarter ended Feb. 28 (Q3), FedEx beat slightly on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share shrank significantly. GAAP earnings per share dropped significantly.
Margins dropped across the board.
FedEx reported revenue of $11.00 billion. The 20 analysts polled by S&P Capital IQ wanted to see revenue of $10.86 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.23. The 27 earnings estimates compiled by S&P Capital IQ predicted $1.38 per share. Non-GAAP EPS of $1.23 for Q3 were 21% lower than the prior-year quarter's $1.55 per share. GAAP EPS of $1.13 for Q3 were 32% lower than the prior-year quarter's $1.65 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 24.2%, 50 basis points worse than the prior-year quarter. Operating margin was 5.8%, 130 basis points worse than the prior-year quarter. Net margin was 3.3%, 160 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $11.48 billion. On the bottom line, the average EPS estimate is $1.99.
Next year's average estimate for revenue is $44.31 billion. The average EPS estimate is $6.06.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,122 members out of 2,337 rating the stock outperform, and 215 members rating it underperform. Among 737 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 698 give FedEx a green thumbs-up, and 39 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on FedEx is outperform, with an average price target of $109.00.
Looking for alternatives to FedEx? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add FedEx to My Watchlist.