Despite the impact of the pandemic COVID-19, FedEx managed to beat the estimates wall Street against financial results 4th quarter thanks to a jump in the growth of electronic Commerce. FedEx refused to forecasts for the 2021 fiscal year.
Shares of FedEx (FDX), which fell 7.3% since the beginning of the year, rose 9% in after-hours trading on Tuesday.
The world’s largest delivery company, has announced the results of the 4th quarter (ended may 31) and the fin. 2020. While FedEx has not provided forecasts to 2021 fin. year due to uncertainties regarding the timing and pace of recovery in the U.S. economy in a pandemic COVID-19.
At the end of the 4th quarter, FedEx suffered a loss (net loss) in the amount of $334 million, compared with a loss of $1.97 billion a year ago. Adjusted earnings per share amounted to $2,53, which is 50% less than last year’s values, but well above the average of analysts ‘ forecasts of $1.52 m.
Total quarterly revenue was down 2% to $17.4 billion, but surpassed the expectations of wall Street $16,49 billion to See a history of revenue and profit of FedEx for the last 2 years can link.
“Virtually all items of income and expenses were affected by the pandemic COVID-19 during the quarter,” – said in a statement. “Despite the fact that the volume of commercial sales decreased significantly due to the closure of plants throughout the world, there was a surge of supply in FedEx Ground for private consumers, as well as transborder and Charter flights FedEx Express, which required additional costs for maintenance”.
Thanks to the surge in e-Commerce (during the closure of most of the physical stores in the USA) a division of FedEx Ground in the 4th quarter, received 20% more income than a year ago, but its operating costs increased. Revenues FedEx Express, more dependent on commercial supplies fell by 10%, which reflected a loss for the company.
In a press release, FedEx announced that “lost approximately $125 million due to an increase in operating costs related to the purchase of personal protective equipment and medical / safety supplies, as well as in connection with additional services of security and cleaning to protect team members and to ensure the safe provision of basic services to their customers.”
Struggling with the negative impact of the pandemic and adverse macroeconomic conditions, FedEx has demonstrated a strong performance, given that FedEx Ground has lost such a large customer like Amazon (AMZN) and the company is in the process of integration cost with TNT Express in Europe. The estimated costs of the integration of TNT Express will be approximately $1.7 billion following the completion of the physical integration in fiscal year 2022, of which $175 million is expected in 2021 fin. year.
Capital costs to 2021 fin. a year are planned at approximately $4.9 billion, or $1 billion less than last year’s value, mainly due to the reduction of the cost of replacement vehicles and delays investment in facilities.
