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FedEx Tops Earnings Estimates, Ties Up Fiscal Year With TNT Express Acquisition

By Corinne Jurney / / June 21st, 2016

(Photo by Justin Sullivan/Getty Images)

FedEx FDX -0.32% reported slightly better-than-expected fourth quarter earnings on Thursday that tied up its fiscal year nicely. Even so, shares edged down 1% in after-hours trading.

The Memphis-based delivery giant said adjusted net income came in at $3.30 per share, up from $2.66 per share a year ago, and beating analyst estimates of $3.28 per share. Revenue for the quarter rose 7.4% to $13 billion, topping analyst estimates of $12.77 billion.

The quarterly results were bolstered by two extra operating days, higher profits at FedEx Express , e-commerce growth and the positive net impact of fuel, according to the company’s release.


However, gains were somewhat offset by lower-than-anticipated revenue in its freight section. FedEx also suffered unfavorable currency exchange rates in the fourth quarter.

FedEx has been shelling out less money for fuel thanks to this year’s oil glut, which sent prices down into the $20 range in February. However, these gains were of limited benefit to the company’s bottom line since FedEx wasn’t passing as high of fuel surcharges, which are fixed to the price of oil, onto customers.

The company completed its acquisition of Dutch courier TNT Express TNTEY +% at the tail-end of this past quarter. This move was spurred by a strong dollar and what was thought to be a recovering European economy, before ‘Brexit’ fears came to a head this week.


The quarterly results brought revenues to $50.4 billion for the year, or $10.80 per share in profits, beating the Street’s estimates by $300 million, or three cents per share.

FedEx continued to repurchase shares of its common stock this past quarter and spent a total of $2.7 billion on buybacks during the fiscal year.

FedEx also notably improved its operating income margin this quarter by 2.4 percentage point to 11.7%, which is above the pre-tax industry average of 5.4% for the first quarter of 2016 according to CSIMarket.

FedEx slipped 37 spots on the FORBES Global 2000 list of the world’s largest public companies this year, to be the third-largest delivery company, behind United Parcel Service UPS +0.54% (UPS) and Deutsche Post. - 24/7 Support including Chat

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