FedEx Misses Q3 Earnings Estimates, Beats on Revenues, Tweaks View

Core Viewpoint - FedEx Corporation reported mixed results for the third quarter of fiscal 2025, with earnings missing estimates while revenues exceeded expectations, indicating a complex financial landscape for the company. Financial Performance - Quarterly earnings, excluding non-recurring items, were $4.51 per share, missing the Zacks Consensus Estimate of $4.65, but representing a 16.8% year-over-year improvement [1] - Revenues reached $22.2 billion, surpassing the Zacks Consensus Estimate of $21.8 billion and showing a 2.1% increase from the previous year [2] - Operating income increased by 4% to $1.29 billion, with operating margin rising to 5.8% from 5.7% year-over-year [3] Segmental Performance - The FedEx Express segment's revenues grew by 3% year-over-year to $19.1 billion, driven by cost reductions and increased export volume, although offset by higher wage rates and the expiration of a contract with the U.S. Postal Service [5] - FedEx Freight revenues fell by 5% year-over-year to $2.08 billion, impacted by lower fuel surcharges and reduced shipment volumes, despite a higher base yield [6][4] Liquidity and Capital Management - FedEx ended the quarter with cash and cash equivalents of $5.14 billion, up from $5.02 billion in the previous quarter, while long-term debt slightly increased to $19.5 billion [7] - The company completed a $2.5 billion share repurchase plan, repurchasing $0.5 billion worth of shares during the quarter, which positively impacted earnings per share by 12 cents [8] Fiscal 2025 Outlook - FedEx updated its full-year guidance, now expecting revenues to be flat to slightly down year-over-year, with EPS projected between $15.15 and $15.75, a decrease from the previous estimate of $16.45 to $17.45 [9][10]