FedEx just published its fiscal Q3 financial results, and the numbers look weak.
The company earned $US1.23 per share, which was far short of the $US1.46 forecasted by analysts.
“Unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs, and impacted year-over-year operating income by an estimated $US125 million,” said management.
Revenue came in at $US11.3 billion, miss expectations for $US11.43 billion.
The stock is down $US2% in premarket trading.
“Historically severe winter weather significantly affected our third-quarter earnings,” said CEO Fred Smith. “On days when the weather was closer to normal seasonal conditions, our volumes were solid and service levels were high. The FedEx strategy of maintaining separate express and ground networks with multiple hubs proved to be an especially important advantage for our package customers during this quarter’s severe weather and peak shipping.”
FedEx delivers packages around the world. As such, it is widely considered a bellwether of economic activity.
“While severe winter weather often affects our third-quarter results, the impact from multiple severe storms and frigid temperatures was significantly more pronounced this year and we are reducing our full-year earnings per share guidance as a result of the weather impact,” warned CFO Alan Graf, Jr.
The company expects to deliver Q4 EPS of $US2.25-$2.50 per share compared to analysts’ forecast for $US2.33. For full year, that means $US6.55-$6.80, which is less than the $US6.90 expected.