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Feb 28, 2021
FedEx Q3 2021 Earnings Report
FedEx's Q3 2021 earnings were marked by strong earnings growth and margin improvement, despite being significantly impacted by severe winter weather.
Key Takeaways
FedEx Corp. reported strong third-quarter results with revenue of $21.5 billion and diluted EPS of $3.30. The company's operating results were significantly impacted by severe winter weather, which reduced the quarter's operating income by an estimated $350 million. Continued strong earnings growth is expected in the fourth quarter.
Strong volume growth in U.S. domestic residential package and FedEx International Priority services.
Pricing initiatives across all transportation segments contributed to operating results.
Costs to support strong demand and expand services partially offset positive factors.
Severe winter weather reduced the quarter’s operating income by an estimated $350 million.
Forward Guidance
FedEx is forecasting earnings of $16.80 to $17.40 per diluted share before the year-end MTM retirement plan accounting adjustment and debt refinancing costs that may be incurred. Capital spending is expected to be $5.7 billion.
Positive Outlook
- Continued recovery in U.S. industrial production and global trade
- No additional COVID-19-related business restrictions
- Current fuel price expectations
- Earnings of $16.80 to $17.40 per diluted share before the year-end MTM retirement plan accounting adjustment and debt refinancing costs
- ETR of 21% to 22% prior to the year-end MTM retirement plan accounting adjustment
Challenges Ahead
- Unable to forecast the fiscal 2021 year-end mark-to-market (MTM) retirement plan accounting adjustment
- Unable to forecast certain debt refinancing costs
- Forecasts assume no additional COVID-19-related business restrictions
Historical Earnings Impact
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Avg. Return Before/After Earnings
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