Shipping heavyweight FedEx (FDX) fiscal Q2 earnings and revenue results stopped short of expectations after Tuesday’s close. FDX stock fell hard in late trade.
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FedEx reported EPS of $3.99, with revenue of $22.2 billion. That marked a 25% gain, short of the 32% increase, to $4.19 a share, expected by analysts polled by FactSet. The revenue target was for a 1.9% gain to $$22.36 billion.
Cost cutting measures and possibly cheaper fuel helped boost the shipping leader’s operating margin to 6.4%, up from 5.3% a year ago.
FedEx earnings rose 32% in its first quarter, the company’s first year-over-year increase in five periods. Revenue has not increased since the August quarter of last year.
Going into Tuesday’s report, analyst consensus projected almost a 22% earnings gain for fiscal 2024. Revenue was expected to slip 1%. Management held its full-year earnings outlook steady, and narrowly trimmed its revenue guidance on Tuesday.
FedEx shares had mustered a 62% gain for the year through Tuesday’s close. The stock was in a buy zone, after breaking out of a cup base on Dec. 8. Shares fell more than 7% in afterhours trading, threatening to snuff the stock’s breakout.
Rival UPS (UPS) stock pared losses to less than 2% in late trading. The stock is down 7% since the start of the year, although it has rebounded 21% since late October. Its earnings are in a three-quarter slump, with revenue down in the four quarters through October.
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