FedEx (FDX) Stock: Why It Fell 16.58% After Hours

By Amit Chowdhry ● Sep 15, 2022
  • The stock price of FedEx Corp. (NYSE: FDX) fell by 16.58% after hours today. This is why.

The stock price of FedEx Corp. (NYSE: FDX) fell by 16.58% after hours today. 

Why: FedEx provided a business update and announced the following preliminary unaudited consolidated results for the quarter ended August 31, 2022 (adjusted measures exclude the items listed below for the applicable fiscal year):

Fiscal 2023

As Reported (GAAP)

Revenue: $23.2 billion

Operating income: $1.19 billion

Diluted EPS: $3.33

Adjusted (non-GAAP)

Revenue: $23.2 billion

Operating income: $1.23 billion

Diluted EPS: $3.44

Fiscal 2022

As Reported (GAAP)

Revenue: $22 billion

Operating income: $1.4 billion

Diluted EPS: $4.09

Adjusted (non-GAAP)

Revenue: $22 billion

Operating income: $1.49 billion

Diluted EPS: $4.37

The first quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. And FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. The FedEx Ground revenue was approximately $300 million below company forecasts.

While the company took immediate and decisive action to adjust its cost base, the impact of cost actions lagged volume declines, and operating expenses remained high relative to demand.

KEY QUOTE:

“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations. While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”

— Raj Subramaniam, FedEx Corporation president and chief executive officer