FedEx
Inside the Numbers
In its fourth quarter, FedEx reported earnings per share of $6.88 which was higher than expectations of $5.02 per share. It was also a significant improvement from last year's loss of $1.28 per share which came during the worst parts of the coronavirus.
Revenue came in at $22.6 billion, a sharp increase from $17.4 billion in last year's Q4. This also was above analysts' expectations of $21.5 billion. The company cited 'exceptional' growth in the U.S. and international shipping volumes as primary factors behind the strong performance. The company sees the global economy recovering and also has been an instrumental player in the delivery and distribution of Covid-19 vaccines and relief supplies across 35 different countries.
Both of the companies' major units - FedEx Ground and FedEx Freight - posted record results for the quarter. The company did say that costs were higher than expected due to offering higher wages to attract workers.
In terms of its full-year results, the company reported EPS of $19.45 and $84 billion in revenue. In 2020, EPS came in at $5.86 and revenue was $69.2 billion. Analysts were forecasting $18.14 per share in earnings and revenue of $83 billion. The company didn't issue firm guidance for 2022, but CFO Michael Lenz indicated that due to 'continue strong momentum' EPS should be in the $20.50 to $21.50 range.
Stock Price Outlook
FedEx's shares are up about 17% this year and up over 100% over the last year. Despite its post-earnings malaise which has become standard over the last few months for companies with strong earnings, it remains an attractive stock. The company has a very reasonable forward price-to-earnings ratio of 12.5 despite expectations of higher growth.
As an important logistics piece of the global economy, FedEx should continue to grow along with the economic expansion. On a technical basis, its chart resembles a cup and handle pattern which is a bullish pattern that often portends big gains. Thus, investors should take advantage of the post-earning dip.