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FedEx (FDX) to Report Q4 Earnings: What's in the Cards?

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FedEx Corporation (FDX - Free Report) is set to release fourth-quarter fiscal 2020 results on Jun 30, after market close.

The Zacks Consensus Estimate for fourth-quarter fiscal 2020 earnings has been revised 27.5% downward in the past 60 days. Moreover, the company has a disappointing earnings history, having missed the consensus mark in three of the trailing four quarters while beating the samein the remaining one.

FedEx Corporation Price and EPS Surprise

 

FedEx Corporation Price and EPS Surprise

FedEx Corporation price-eps-surprise | FedEx Corporation Quote

Against this backdrop, let’s delve into the factors that might have impacted the company’s performance in the soon-to-be-reported quarter.

Continuing with the trend from the last few quarters, FedEx’s primary revenue generating segment, FedEx Express, is likely to have performed disappointingly in fourth-quarter fiscal 2020. The coronavirus-induced global economic slowdown is likely to have dented its segmental performance as well.

Further, supply-chain disruptions due to the pandemic might have weighed on the performance of FedEx, which competes with the likes of United Parcel Service (UPS - Free Report) . Notably, the Zacks Consensus Estimate for segmental revenues in the to-be-reported quarter indicates an 8.6% decline from the year-ago reported number. Additionally, high costs at the Ground unit and TNT Express integration expenses are expected to have hurt the company’s bottom line.

However, FedEx Ground revenues are likely to have been high in the period under consideration owing to growth in residential delivery volume. Notably, the Zacks Consensus Estimate for segmental revenues in the to-be-reported quarter suggests a 2% increase from the year-ago reported figure.

Moreover, accelerated customer demand for e-commerce — the method of buying and selling goods and services via a software platform — in this coronavirus-ravaged scenario is expected to have aided FedEx’s quarterly performance. Notably, the urgency for door-to-door delivery of essentials is even more during such unprecedented crisis.

Earnings Whispers

The proven Zacks model does not conclusively predict an earnings beat for FedEx in the fiscal fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise. However, that is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: FedEx has an Earnings ESP of -15.17% as the Most Accurate Estimate is pegged at $1.41, lower than the Zacks Consensus Estimate of $1.66. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: FedEx carries a Zacks Rank # 3.

Highlights of Q3 Earnings

In the last reported quarter, the company witnessed a negative earnings surprise of 5.4%. Moreover, the bottom line plunged 53.5% year over year. Results were hampered by factors like the COVID-19 pandemic, weak macroeconomic conditions and cost concerns. Quarterly revenues, however, surpassed the Zacks Consensus Estimate and improved year over year too.

Stocks to Consider

Investors may consider the following stocks as these possess the right combination of elements to beat on earnings in the upcoming releases.

General Mills (GIS - Free Report) has an Earnings ESP of +2.10% and a Zacks Rank  of 3. The company will release fourth-quarter fiscal 2020 results on Jul 1.

Worthington Industries (WOR - Free Report) has an Earnings ESP of +1.96% and is Zacks #3 Ranked. The company will release fourth-quarter fiscal 2020 results on Jun 25.


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