FedEx Corporation (FDX) earnings release review for the 2nd quarter of their 2021 fiscal year
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Category: FedEx Corporation (FDX)
Date: 18 December 2020 Stock Price of Fedex: $292.26 We take a look at the 2nd quarter earnings release of their 2021 fiscal year of FedEx Corporation one of the world's leading logistics services companies. For their 2nd quarter 2021 Fedex reported revenues of $20.6 billion and net income of $1.23 billion.
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My sincere appreciation goes out to our nearly 600,000 team members around the world who go above and beyond to keep the world moving during this ongoing pandemic and unprecedented peak season. Our strong revenue and earnings growth during the quarter is a reflection of their continued hard work and commitment to our customers - Frederick W. Smith, FedEx Corp. chairman and CEO"
About FedEx Corporation
FedEx has grown tremendously since its first night of operations in 1973. Now FedEx serves more than 220 countries and territories and continues to offer new products and services around the globe. FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $69 billion, the company offers integrated business solutions through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 500,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities
FedEx Express plane
Overview FedEx's 1st quarter 2021 earnings report
The numbers we are interested in (for the quarter):
- Revenue: $19.3 billion (up strongly compared to $17.05 billion from the same quarter of the previous year)
- Net loss: $1.245 billion (up strongly from $745 million for the same quarter of the previous year)
- Diluted earnings per share: $4.72 (up strongly from $2.84 for the same quarter of the previous year)
- PE ratio of FedEx: 12.8
- PE ratio of FedEx: 12.8
- Dividend declared: $1.30
- Dividend yield of Fedex: 2.1%
- Dividend yield of Fedex: 2.1%
- Number of shares in issue: 262 million
- Cash and cash equivalents of FedEx: $6.954 billion (up from $4.881 billion for the same quarter of the previous year)
- Cash and equivalents per share: $26,53
- Cash and equivalents makes up 10.9% of FedEx's current market capital
- Cash and equivalents makes up 8.9% of FedEx's total assets
- Stockholders equity of FedEx: $19.462 billion
- Stockholders equity per share: $74.28
- FedEx is trading at 3.2 times its stockholders equity per share. It is trading within the expected range that most firms tend to trade at which is levels between 2 and 4 times its stated stockholders equity per share.
- For some perspective the average price to book value of firms in the S&P 500 is 3.7
- Cash generated from operations: $2.651 billion
- Cash generated from operations per share: $10.11
FedEx's management commentary on their 4th quarter 2020 earnings
MEMPHIS, Tenn., December 17, 2020 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the quarter ended November 30.
"My sincere appreciation goes out to our nearly 600,000 team members around the world who go above and beyond to keep the world moving during this ongoing pandemic and unprecedented peak season. Our strong revenue and earnings growth during the quarter is a reflection of their continued hard work and commitment to our customers,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer.
“These results demonstrate the unparalleled strength of our global express network, the breadth of our e-commerce capabilities, and the dedication of our people.” Operating results increased due to volume growth in FedEx International Priority and U.S. domestic residential package services and pricing initiatives across all transportation segments. These factors were partially offset by costs to support strong demand and to expand services, variable compensation expense, and COVID-19-related costs, including expenses incurred to ensure the safety of FedEx team members and customers as well as the costs of network contingencies, including additional personnel to support operations through the pandemic
"My sincere appreciation goes out to our nearly 600,000 team members around the world who go above and beyond to keep the world moving during this ongoing pandemic and unprecedented peak season. Our strong revenue and earnings growth during the quarter is a reflection of their continued hard work and commitment to our customers,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer.
“These results demonstrate the unparalleled strength of our global express network, the breadth of our e-commerce capabilities, and the dedication of our people.” Operating results increased due to volume growth in FedEx International Priority and U.S. domestic residential package services and pricing initiatives across all transportation segments. These factors were partially offset by costs to support strong demand and to expand services, variable compensation expense, and COVID-19-related costs, including expenses incurred to ensure the safety of FedEx team members and customers as well as the costs of network contingencies, including additional personnel to support operations through the pandemic
Outlook
FedEx is not providing an earnings forecast for fiscal 2021. The capital spending forecast for the year remains $5.1 billion. “The benefits of the investments across our business over the past several years are reflected in our strong second quarter results,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “While the overall environment remains uncertain, we expect earnings growth in the second half of fiscal 2021 driven by the anticipated heightened demand for our services as we continue to execute on our strategic priorities.”
FedEx is not providing an earnings forecast for fiscal 2021. The capital spending forecast for the year remains $5.1 billion. “The benefits of the investments across our business over the past several years are reflected in our strong second quarter results,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “While the overall environment remains uncertain, we expect earnings growth in the second half of fiscal 2021 driven by the anticipated heightened demand for our services as we continue to execute on our strategic priorities.”
FedEx (FDX) stock price history over the last 5 years
The image below, obtained from Google, shows the stock price history of FedEx (NYSE: FDX) over the last 5 years. And it's been a good time for FedEx stockholders. 5 years ago the stock of FedEx was trading at $145 a stock, and its currently it's trading at $242.
That's a pretty strong return of 67.4% provided to FDX stockholders over the last 5 years. The stock of FedEx trading at a lot closer to its 52 week high of $256.18 than it is to its 52 week low of $88.69 which to us is a clear indication that the short term sentiment and momentum of the stock is relatively positive at this point in time.
That's a pretty strong return of 67.4% provided to FDX stockholders over the last 5 years. The stock of FedEx trading at a lot closer to its 52 week high of $256.18 than it is to its 52 week low of $88.69 which to us is a clear indication that the short term sentiment and momentum of the stock is relatively positive at this point in time.
FedEx (NYSE: FDX) stock price history over the last 5 years.
Fedex (FDX) stock vs United Parcel Service (UPS) stock over the last 5 years
The image below shows the stock price performance of Fedex (FDX) and United Parcel Service (UPS) over the last 5 years. Both logistics firms have had a pretty strong run after initial coronavirus related sell offs in their stock price. The summary below shows the stock price returns of Fedex and UPS over the last 5 years:
While the stock price trends and the returns are very similar over the last 5 years, it is Fedex (FDX) that takes out the win from United Parcel Service over the last 5 years.
- Fedex (FDX): 98.8%
- United Parcel Service: 92.6%
While the stock price trends and the returns are very similar over the last 5 years, it is Fedex (FDX) that takes out the win from United Parcel Service over the last 5 years.
Fedex (FDX) stock vs United Parcel Service (UPS) stock over the lat 5 years
Recent coverage of FedEx (FDX)
The extract below covers the latest earnings reported by FedEx as obtained from Fool.com
FedEx delivers strong financial resultsFedEx shares were up more than 1% in the regular session. But the stock dropped almost 4% in after-hours trading following the release of its quarterly results from the most recent three months.
On its face, FedEx's fiscal second-quarter financial report looked incredibly strong. Revenue climbed 19% to $20.6 billion. Net income almost doubled on an adjusted basis from year-earlier numbers, with adjusted earnings of $4.83 per share rising 92% year over year compared to the $2.51 per share that FedEx put up in the same period last year.
Read the full article here
FedEx delivers strong financial resultsFedEx shares were up more than 1% in the regular session. But the stock dropped almost 4% in after-hours trading following the release of its quarterly results from the most recent three months.
On its face, FedEx's fiscal second-quarter financial report looked incredibly strong. Revenue climbed 19% to $20.6 billion. Net income almost doubled on an adjusted basis from year-earlier numbers, with adjusted earnings of $4.83 per share rising 92% year over year compared to the $2.51 per share that FedEx put up in the same period last year.
Read the full article here
FedEx (NYSE: FDX) latest stock valuation
So based on FedEx (FDX) latest earnings report and their outlook provided what do we value FedEx's stock at? Based on their latest earnings and the outlook provided by the group our target price (full value price) for FedEx is sitting at $303.10 a stock (up strongly from our 1Q 2021 earnings report review of FedEx). We therefore believe the stock of FedEx is slightly undervalued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $303.10 Therefore we believe the a good entry point into the stock is below $272.80. We expect the stock of FedEx to kick up slightly in coming weeks and months to levels closer to our target price. Since it is trading at just below our target price we rate the stock of FedEx as a hold.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $303.10 Therefore we believe the a good entry point into the stock is below $272.80. We expect the stock of FedEx to kick up slightly in coming weeks and months to levels closer to our target price. Since it is trading at just below our target price we rate the stock of FedEx as a hold.
Next earnings release of FedEx
It is expected that FedEx (FDX) will release their 3rd quarter 2021 earnings report in late March 2021