FedEx (NYSE: FDX) posted lower-than-anticipated fiscal 2022 fourth-quarter earnings and estimates. However, the company issued a robust outlook for FY 2023. This enabled the stock to hold ground on Friday last week. Additionally, the sharp dividend increase declared a week before enabled the company’s stock to maintain its upward momentum. The stock ended at $243.24, up $16.26 or 7.16% from its previous close.
The Memphis-based shipping giant reported fourth-quarter revenues of $24.40 billion, an increase of 8% from $22.60 billion in the similar quarter last year.
For the May 31, 2022 quarter, FedEx reported a net income of $0.56 billion, or $2.13 per share, compared with a net income of $1.868 billion, or $6.88 per share for the quarter ended May 31, 2021.
Excluding Mark-to-market (MTM) retirement plans accounting adjustments, FedEx Ground legal matter, business realignment costs, and TNT Express integration expenses, among others, the 4Q 2022 non-GAAP net revenue was $1.80 billion, or $6.87 per share, up from $5.01 billion, or $1.36 billion per share, in 4Q 2021.
FactSet analysts anticipated the company would report earnings of $6.88 per share on revenues of $24.501 billion.
FedEx Corp. President and CEO said, “Our fiscal 2022 financial performance was a result of our team’s ability to adapt to a number of unexpected challenges and is a testament to the FedEx value proposition and the execution of our long-term strategy.”
Segment-wise,
- The Express segment income increased 6% y-o-y to $11.939 billion.
- The Ground segment revenues were $8.491 billion, up 4% from 2021.
- The Freight segment revenues increased 23% y-o-y to $2.756 billion.
- The FedEx Services segment revenues were $76 million, an surge of 850% on a y-o-y basis.
For fiscal 2023, the company anticipates earnings to be in the range of between $22.50 and $24.50 per share, higher than FactSet analysts’ forecasts of $22.21 per share.
The CEO stated that the company would concentrate on lowering costs and maintaining revenue quality. Additionally, FedEx has forecasted capital spending of $6.80 billion in FY 2023.
During FY 2022, the company repurchased shares worth $2.20 billion. At the end of May, FedEx had a prevailing share repurchase authorization of $4.10 billion. The company anticipates repurchasing $1.50 billion worth of shares in the first half of fiscal 2023.
It can be remembered that the stock price saw a sharp rise in mid-June after the company raised its dividend by 53% on June 14. Furthermore, the company also revealed that it had reached an agreement with activist shareholders to include new board members.
The quarterly earnings miss and upbeat FY 2023 earnings outlook are expected to keep the stock of FedEx range-bound with a bullish bias in the short term.
The historical price chart reveals that the stock is rising after testing the support at 200. The next resistance is anticipated at around 260. The stock is trading above its 50-day moving average, while the ultimate oscillator reading is above 50. Therefore, we anticipate the stock to stay in an uptrend in the near term.
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