FedEx Reports FY2Q Earnings
On Tuesday, December 17, 2019, FedEx released its earnings for 2Q 2020, and the results were dismal.
The company reported $17.3 billion in revenue, down from the $17.8 billion posted in the year-before quarter. Net income was $560 million, down 40% from $935 million in the 2019 second quarter.
FedEx Express Segment
Revenue of $9.1 billion and $236 million in operating income compared to $9.6 billion and $630 million last year.
Operating margin fell to 2.6% from 6.6% a year ago.
FedEx Ground Segment
Revenue of $5.3 billion and $342 million in operating income compared to $5.1 billion and $590 million last year.
Operating margin fell to 6.4% from 11.5% a year ago.
- Revenue was down over $300 million.
- EPS was down $0.27.
- 2Q Operating Margin was 3.2% versus the 5.35% estimate.
- $3.5 billion in market valuation erosion.
- FDX stock was down as much as 8% in trading on Wednesday, December 18.
FedEx attributed the miss to several factors, including weakening global economic conditions, increased FedEx Ground costs from expanded service offerings, the loss of business from Amazon and a more competitive pricing environment. The later timing of the Thanksgiving holiday shifted cyber week into December, which negatively impacted the quarter’s results.