FedEx (FDX) Tops Q3 EPS by 23c, Offers FY Guidance

FedEx (NYSE: FDX) reported Q3 EPS of $3.47, $0.23 better than the analyst estimate of $3.24. Revenue for the quarter came in at $21.5 billion versus the consensus estimate of $19.96 billion.

GUIDANCE:

FedEx sees FY2021 EPS of $17.60-$18.20, may not compare to consensus of $17.40.

FedEx is unable to forecast the fiscal 2021 year-end mark-to-market (MTM) retirement plan accounting adjustment and certain debt refinancing costs that may be incurred in connection with debt reduction and refinancing transactions as part of the company’s capital allocation strategy. As a result, FedEx is unable to provide a fiscal 2021 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.

For fiscal 2021, FedEx is forecasting:

• Earnings of $16.80 to $17.40 per diluted share before the year-end MTM retirement plan accounting adjustment and debt refinancing costs that may be incurred;
• Earnings of $17.60 to $18.20 per diluted share before (i) the year-end MTM retirement plan accounting adjustment and (ii) debt refinancing costs that may be incurred and excluding (iii) TNT Express integration expenses; (iv) costs associated with business realignment activities; and (v) the second quarter fiscal 2021 MTM TNT Express retirement plan accounting adjustment;
• ETR of 21% to 22% prior to the year-end MTM retirement plan accounting adjustment; and
• Capital spending of $5.7 billion, an increase from the prior forecast due to changes in the timing of aircraft payments and the acceleration of FedEx Ground capacity expansion initiatives.

These forecasts assume continued recovery in U.S. industrial production and global trade, no additional COVID-19-related business restrictions and current fuel price expectations. FedEx’s ETR and earnings per share forecasts are based on current law and related regulations and guidance.

“The significant improvement in our third quarter results highlights the momentum in our business which continued through an unprecedented peak season,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “Our growth in fiscal 2021 has identified opportunities for investments that further position us for sustained long-term growth in earnings and cash flows as we move into fiscal 2022 and beyond.”

For earnings history and earnings-related data on FedEx (FDX) click here.

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