FedEx Corp. (NYSE: FDX) today reported the following
consolidated results for the first quarter ended August 31
(adjusted measures exclude TNT Express integration expenses as
described below):
Fiscal 2021
Fiscal 2020
As Reported (GAAP)
Adjusted (non-GAAP)
As Reported (GAAP)
Adjusted (non-GAAP)
Revenue
$19.3 billion
$19.3 billion
$17.0 billion
$17.0 billion
Operating income
$1.59 billion
$1.64 billion
$0.98 billion
$1.05 billion
Operating margin
8.2%
8.5%
5.7%
6.1%
Net income
$1.25 billion
$1.28 billion
$745 million
$800 million
Diluted EPS
$4.72
$4.87
$2.84
$3.05
This year’s and last year’s quarterly consolidated results have
been adjusted for TNT Express integration expenses of $49 million
($0.14 per diluted share) for this year and $71 million ($0.21 per
diluted share) for last year.
“Our earnings growth underscores the importance of our business
initiatives and investments over the last several years, and, in
many ways, the world has accelerated to meet our strategies,” said
Frederick W. Smith, FedEx Corp. chairman and chief executive
officer. “I would like to thank our team members whose efforts
during this time have helped keep the world’s health care,
industrial and at-home supply chains moving despite the challenges
of the global pandemic.”
Operating results increased due to volume growth in FedEx
International Priority and U.S. domestic residential package
services, yield improvement at FedEx Ground and FedEx Freight, and
one additional operating weekday. These factors were partially
offset by costs to support strong demand and to expand services,
variable compensation expenses, and COVID-19 related costs incurred
to ensure the safety of FedEx team members and customers.
Outlook
FedEx is not providing an earnings forecast for fiscal 2021. The
capital spending forecast for the year is up $200 million to $5.1
billion, driven by additional capacity initiatives to support
increased volume levels.
“While business demand improved in the first quarter, continued
uncertainties cloud our ability to forecast full-year earnings,”
said Alan B. Graf, Jr., FedEx Corp. executive vice president and
chief financial officer. “However, we expect to continue to benefit
from our strong position in the U.S. and international package and
freight markets, yield improvement opportunities and cost
management initiatives.”
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses
worldwide with a broad portfolio of transportation, e-commerce and
business services. With annual revenue of $71 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. To learn more about how FedEx connects people and
possibilities around the world, please visit about.fedex.com.
Additional information and operating data are contained in the
company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks and
Statistical Books. These materials, as well as a webcast of the
earnings release conference call to be held at 5:30 p.m. EDT on
September 15, are available on the company’s website at
investors.fedex.com. A replay of the conference call webcast will
be posted on our website following the call.
The Investor Relations page of our website, investors.fedex.com,
contains a significant amount of information about FedEx, including
our Securities and Exchange Commission (SEC) filings and financial
and other information for investors. The information that we post
on our Investor Relations website could be deemed to be material
information. We encourage investors, the media and others
interested in the company to visit this website from time to time,
as information is updated and new information is posted.
Certain statements in this press release may be considered
forward-looking statements, such as statements relating to
management’s views with respect to future events and financial
performance and underlying assumptions. Forward-looking statements
include those preceded by, followed by or that include the words
“will,” “may,” “could,” “would,” “should,” “believes,” “expects,”
“anticipates,” “plans,” “estimates,” “targets,” “projects,”
“intends” or similar expressions. Such forward-looking statements
are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from historical
experience or from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, the negative impacts of the
COVID-19 pandemic; economic conditions in the global markets in
which we operate; anti-trade measures and additional changes in
international trade policies and relations; a significant data
breach or other disruption to our technology infrastructure; our
ability to successfully integrate the businesses and operations of
FedEx Express and TNT Express in the expected time frame and at the
expected cost and to achieve the expected benefits from the
combined businesses; our ability to successfully implement our
business strategy, effectively respond to changes in market
dynamics and achieve the anticipated benefits and associated cost
savings of such strategies and actions; the impact of the United
Kingdom’s withdrawal from the European Union; changes in fuel
prices or currency exchange rates; our ability to match capacity to
shifting volume levels; the impact of intense competition; evolving
or new U.S. domestic or international government regulation or
regulatory actions, future guidance, regulations, interpretations
or challenges to our tax positions; our ability to effectively
operate, integrate, leverage and grow acquired businesses; legal
challenges or changes related to service providers engaged by FedEx
Ground and the drivers providing services on their behalf; an
increase in self-insurance accruals and expenses; disruptions or
modifications in service by, or changes in the business or
financial soundness of, the U.S. Postal Service; the impact of any
international conflicts or terrorist activities; our ability to
quickly and effectively restore operations following adverse
weather or a localized disaster or disturbance in a key geography;
and other factors which can be found in FedEx Corp.’s and its
subsidiaries’ press releases and FedEx Corp.’s filings with the
SEC. Any forward-looking statement speaks only as of the date on
which it is made. We do not undertake or assume any obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.
The financial section of this release is provided on the
company's website at investors.fedex.com
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES TO GAAP FINANCIAL MEASURES
First Quarter Fiscal 2021 and Fiscal
2020 Results
The company reports its financial results in accordance with
accounting principles generally accepted in the United States
(“GAAP” or “reported”). We have supplemented the reporting of our
financial information determined in accordance with GAAP with
certain non-GAAP (or “adjusted”) financial measures, including our
adjusted first quarter fiscal 2021 and 2020 consolidated operating
income and margin, net income and diluted earnings per share, and
adjusted first quarter fiscal 2021 and 2020 FedEx Express segment
operating income and margin. These financial measures have been
adjusted to exclude the impact of TNT Express integration expenses
incurred in fiscal 2021 and 2020.
We have incurred and expect to incur significant expenses
through fiscal 2022 in connection with our integration of TNT
Express. We have adjusted our first quarter fiscal 2021 and 2020
consolidated and FedEx Express segment financial measures to
exclude TNT Express integration expenses because we generally would
not incur such expenses as part of our continuing operations. The
integration expenses are predominantly incremental costs directly
associated with the integration of TNT Express, including
professional and legal fees, salaries and employee benefits,
advertising and travel expenses. Internal salaries and employee
benefits are included only to the extent the individuals are
assigned full-time to integration activities.
We believe these adjusted financial measures facilitate analysis
and comparisons of our ongoing business operations because they
exclude items that may not be indicative of, or are unrelated to,
the company’s and our business segments’ core operating
performance, and may assist investors with comparisons to prior
periods and assessing trends in our underlying businesses. These
adjustments are consistent with how management views our
businesses. Management uses these non-GAAP financial measures in
making financial, operating and planning decisions and evaluating
the company’s and each business segment’s ongoing performance.
Our non-GAAP financial measures are intended to supplement and
should be read together with, and are not an alternative or
substitute for, and should not be considered superior to, our
reported financial results. Accordingly, users of our financial
statements should not place undue reliance on these non-GAAP
financial measures. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures having
the same or similar names. As required by Securities and Exchange
Commission rules, the tables below present a reconciliation of our
presented non-GAAP financial measures to the most directly
comparable GAAP measures.
First Quarter Fiscal
2021
FedEx Corporation
Operating
Income
Net
Diluted Earnings
Dollars in millions, except EPS
Income
Margin
Taxes1
Income2
Per Share3
GAAP measure
$1,590
8.2%
$361
$1,245
$4.72
TNT Express integration expenses4
49
0.3%
11
38
0.14
Non-GAAP measure
$1,639
8.5%
$372
$1,283
$4.87
FedEx Express Segment
Operating
Dollars in millions
Income
Margin3
GAAP measure
$710
7.4%
TNT Express integration expenses
37
0.4%
Non-GAAP measure
$747
7.7%
First Quarter Fiscal
2020
FedEx Corporation
Operating
Income
Net
Diluted Earnings
Dollars in millions, except EPS
Income
Margin
Taxes1
Income2
Per Share
GAAP measure
$977
5.7%
$251
$745
$2.84
TNT Express integration expenses4
71
0.4%
16
55
0.21
Non-GAAP measure
$1,048
6.1%
$267
$800
$3.05
FedEx Express Segment
Operating
Dollars in millions
Income
Margin
GAAP measure
$285
3.2%
TNT Express integration expenses
57
0.6%
Non-GAAP measure
$342
3.8%
Notes:
1 – Income taxes are based on the
company’s approximate statutory tax rates applicable to each
transaction.
2 – Effect of “total other (expense)
income” on net income amount not shown.
3 – Does not sum to total due to
rounding.
4 – These expenses were recognized at
FedEx Corporate and FedEx Express.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200915006271/en/
Media Contact: Jenny Robertson 901-434-4829 Investor Contact:
Mickey Foster 901-818-7468 Home Page: fedex.com
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