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.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends FedEx and recommends the following options:Long Jan 2015 $65 Calls on FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.