FedEx Q4 Sales and Earnings Sail Past Estimates

Logistics company FedEx reported its fourth quarter financial results on Thursday that revealed sales and earnings topping estimates as e-commerce, business spending ramped up.

Despite the great quarter, shares fell more than 3% in late trading.

The results for the fourth quarter compared to consensus estimates compiled by Bloomberg are as follows:

Revenue hit $22.6 billion compared to the $21.49 billion that was expected and $17.36 billion Y/Y. Adjusted earnings per share were $5.01 compared to the $5.00 expected, and $2.53 Y/Y.

Sales jumped by 30% over last year, the fastest rate since at least 2010, based on Bloomberg data.

“Fourth quarter operating results increased primarily due to volume growth and disciplined revenue and portfolio management,” the company said in its earnings statement. “These factors were partially offset by costs to support strong demand, increased variable compensation expense, and higher labor rates.”

Looking ahead, the company’s outlook also exceeded estimates. FedEx expects full-year adjusted earnings to come in between $20.50 and $21.50 a share, excluding some items, whereas consensus analysts were looking for $20.48 per share.

“We believe a strong pricing trend and cyclical improvement in B2B [business-to-business] volumes provide support for margin expansion in Ground and Express,” wrote UBS analyst Thomas Wadewitz ahead of the results. The firm has FedEx shares rated as a Buy, with a $383 12-month price target.

Shares of FedEx have increased by over 17% for the year-to-date.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.