FedEx Corporation (NYSE: FDX) earnings release for the 4th quarter of their 2020 fiscal year
Category: Stock Market and FedEx Corporation
Date: 1 July 2020 Stock Price of Fedex: $140.22 We take a look at the 4th quarter earnings release of their 2020 fiscal year of FedEx Corporation one of the world's leading logistics services companies with revenues of almost $70 billion in their 2019 fiscal year. Question is how hard has the company been hit by the Covid-19 pandemic that has spread across the globe like wildfire ?
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Through our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members- 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
Overview FedEx's 4th quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Revenue: $17.4 billion (flat compared to $17.4 billion from the same quarter of the previous year)
- Net loss: -$334 million (down from $663 million for the same quarter of the previous year)
- Diluted loss per share: -$1.28 (down from $2.53for the same quarter of the previous year)
- Number of shares in issue: 261 million
- Cash and cash equivalents of FedEx: $4.881 billion (up from $2.39 billion for the same quarter of the previous year)
- Cash and equivalents per share: $18.70
- Cash and equivalents makes up 13.6% of FedEx's current market capital
- Cash and equivalents makes up 6.63% of FedEx's total assets
- Stockholders equity of FedEx: $18.295 billion
- Stockholders equity per share: $70.09
- FedEx is trading at 2 times its stockholders equity per share. It is trading within the expected range as most firms tend to trade at 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 for full fiscal year: $5.097 billion
- Cash generated from operations per share: $19.52
FedEx's management commentary on their 4th quarter 2020 earnings
MEMPHIS, Tenn., June 30, 2020 ... FedEx Corp. today reported the following consolidated results for the fourth quarter ended May 31
"Though our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members,” said Frederick W. Smith, FedEx Corp. chairman and CEO. “With safety as the first priority, these men and women provided essential transportation of critical supplies across the globe and delivered peak-level e-commerce volumes in the United States. As a result of the strategic investments we have made to enhance our capabilities and efficiencies, FedEx is well positioned to support and benefit from the reopening of the global economy.”
"Though our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members,” said Frederick W. Smith, FedEx Corp. chairman and CEO. “With safety as the first priority, these men and women provided essential transportation of critical supplies across the globe and delivered peak-level e-commerce volumes in the United States. As a result of the strategic investments we have made to enhance our capabilities and efficiencies, FedEx is well positioned to support and benefit from the reopening of the global economy.”
Outlook
FedEx is not providing an earnings forecast for fiscal 2021 as the timing and pace of an economic recovery are uncertain. FedEx will continue to manage network capacity, making adjustments as needed to align with volumes and operating conditions. FedEx will also remain focused on last-mile optimization, including the continued rollout of the FedEx Express initiative to utilize FedEx Ground for the transport and delivery of select day-definite FedEx Express residential packages within the U.S. FedEx Ground will complete the integration of FedEx SmartPost packages into standard FedEx Ground operations by peak season.
TNT Express integration expenses are estimated to total approximately $1.7 billion through the completion of the physical network integration in fiscal 2022, of which $175 million is expected to be incurred this fiscal year. Capital expenditures for fiscal 2021 are targeted to be approximately $4.9 billion, a $1 billion year-over-year decline, due primarily to reduced vehicle replacement spending and delayed facility investments.
The company does not anticipate making contributions to its tax-qualified U.S. domestic pension plans during fiscal 2021, following voluntary contributions of $1 billion during each of the last two fiscal years. “We have reduced our planned capital spending where possible and have taken actions to mitigate the impact of the pandemic,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “While the near-term outlook is unclear, we expect to benefit from the global recovery as we leverage the strength of our unmatched air network and U.S. residential capabilities, our yield management efforts and multiple initiatives to improve our financial performance.”
FedEx is not providing an earnings forecast for fiscal 2021 as the timing and pace of an economic recovery are uncertain. FedEx will continue to manage network capacity, making adjustments as needed to align with volumes and operating conditions. FedEx will also remain focused on last-mile optimization, including the continued rollout of the FedEx Express initiative to utilize FedEx Ground for the transport and delivery of select day-definite FedEx Express residential packages within the U.S. FedEx Ground will complete the integration of FedEx SmartPost packages into standard FedEx Ground operations by peak season.
TNT Express integration expenses are estimated to total approximately $1.7 billion through the completion of the physical network integration in fiscal 2022, of which $175 million is expected to be incurred this fiscal year. Capital expenditures for fiscal 2021 are targeted to be approximately $4.9 billion, a $1 billion year-over-year decline, due primarily to reduced vehicle replacement spending and delayed facility investments.
The company does not anticipate making contributions to its tax-qualified U.S. domestic pension plans during fiscal 2021, following voluntary contributions of $1 billion during each of the last two fiscal years. “We have reduced our planned capital spending where possible and have taken actions to mitigate the impact of the pandemic,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “While the near-term outlook is unclear, we expect to benefit from the global recovery as we leverage the strength of our unmatched air network and U.S. residential capabilities, our yield management efforts and multiple initiatives to improve our financial performance.”
FedEx (NYSE: FDX) stock price history
The image below, obtained from Google, shows the stock price history of FedEx (NYSE: FDX) over the last 5 years. And it hasn't been a good time for FedEx stockholders. 5 years ago the stock of FedEx was trading at $168 a stock, and its currently it's trading at $140.22.
Thats a loss of -6.4% suffered by FDX stockholders over the last 5 years. The stock of FedEx trading at a lot closer to its 52 week high of $178.50 than it is to its 52 week low of $88.69which to us is a clear indication that the short term sentiment and momentum of the stock is relatively positive at this point in time.
Thats a loss of -6.4% suffered by FDX stockholders over the last 5 years. The stock of FedEx trading at a lot closer to its 52 week high of $178.50 than it is to its 52 week low of $88.69which to us is a clear indication that the short term sentiment and momentum of the stock is relatively positive at this point in time.
Recent coverage of FedEx (FDX)
The extract below covers the lastest earnings reported by FedEx as obtained from Investors.com
FedEx (FDX) easily beat fiscal Q4 estimates late Tuesday, helped by gains in residential deliveries and shipments across the Pacific. FedEx stock jumped.
FedEx Earnings Estimates: Analysts expect FedEx earnings to dive nearly 72% to $1.42 as revenue shrinks 9.5% to $16.12 billion, according to Zacks Investment Research.
Results: EPS of $2.53 on revenue of $17.4 billion. Commercial volumes were down significantly due to business closures. But residential deliveries at FedEx Ground surged, and in trans-Pacific and charter flights at FedEx Express also rose.
Outlook: FedEx declined to give fiscal 2021 earnings guidance. But capital expenditures are seen at $4.9 billion, a $1 billion decline from 2020, due primarily to reduced vehicle replacement spending and delayed facility investments.
TNT Express integration expenses are seen at $1.7 billion fiscal 2022, with $175 million expected to be incurred this fiscal year. "While the near-term outlook is unclear, we expect to benefit from the global recovery as we leverage the strength of our unmatched air network and U.S. residential capabilities, our yield management efforts and multiple initiatives to improve our financial performance," said CFO Alan Graf.
Read the full article here
FedEx (FDX) easily beat fiscal Q4 estimates late Tuesday, helped by gains in residential deliveries and shipments across the Pacific. FedEx stock jumped.
FedEx Earnings Estimates: Analysts expect FedEx earnings to dive nearly 72% to $1.42 as revenue shrinks 9.5% to $16.12 billion, according to Zacks Investment Research.
Results: EPS of $2.53 on revenue of $17.4 billion. Commercial volumes were down significantly due to business closures. But residential deliveries at FedEx Ground surged, and in trans-Pacific and charter flights at FedEx Express also rose.
Outlook: FedEx declined to give fiscal 2021 earnings guidance. But capital expenditures are seen at $4.9 billion, a $1 billion decline from 2020, due primarily to reduced vehicle replacement spending and delayed facility investments.
TNT Express integration expenses are seen at $1.7 billion fiscal 2022, with $175 million expected to be incurred this fiscal year. "While the near-term outlook is unclear, we expect to benefit from the global recovery as we leverage the strength of our unmatched air network and U.S. residential capabilities, our yield management efforts and multiple initiatives to improve our financial performance," said CFO Alan Graf.
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 at $162.10 a stock (up slightly from our 1Q 2020 earnings report review of FedEx). We therefore believe the stock of FedEx is 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 $162.10 Therefore we believe the a good entry point into the stock is below $145.90. We expect the stock of FedEx to kick up in coming weeks and months to levels closer to our target price.
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 $162.10 Therefore we believe the a good entry point into the stock is below $145.90. We expect the stock of FedEx to kick up in coming weeks and months to levels closer to our target price.
Next earnings release of FedEx
It is expected that FedEx (FDX) will release their 1st quarter 2021 earnings report in late September 2020