FedEx Posts Stronger-Than-Expected Revenue, Adjusted Profit Amid Pandemic

“Virtually all revenue and expense line items were affected by the Covid-19 pandemic during the quarter,” the company said.
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FedEx  (FDX) - Get Report shares rose in after-hours trading, after the delivery giant posted stronger-than-expected revenue and adjusted profit in its latest quarter amid the coronavirus pandemic.

For the fiscal 2020 fourth quarter ended May 31, the company reported revenue of $17.4 billion, down from $17.8 billion a year earlier. But the latest number easily topped FactSet’s analyst consensus of $16.4 billion.

Still, that wasn’t enough to create profits. FedEx suffered a loss of $334 million in the latest quarter, or $1.28 per share, shrinking from a loss of $1.97 billion, or $7.56 per share, a year ago. Analysts expected earnings per share of $1.33 for the latest quarter.

Adjusted EPS totaled $2.53 in the latest quarter, blowing away analysts’ prediction of $1.58.

For FedEx, the period was all about the pandemic.

“Virtually all revenue and expense line items were affected by the Covid-19 pandemic during the quarter,” the company said in a statement.

“While commercial volumes were down significantly due to business closures across the globe, there were surges in residential deliveries at FedEx Ground and in trans-pacific and charter flights at FedEx Express, which required incremental costs to serve.”

And that wasn’t it for expenses.

“The company also incurred an approximate $125 million increase in operating costs related to personal protective equipment and medical/safety supplies, as well as additional security and cleaning services to protect our team members and ensure we are safely providing essential services for our customers,” FedEx said.

FedEx shares stood at $152.73 in after-hours trading, up 9.01% from Tuesday’s close.

The stock rose 4.21% during the regular session and gained 16% in the three months through Tuesday’s close.

Shares of delivery rival United Parcel Service  (UPS) - Get Report rose 5% in after-hours trading in apparent sympathy with FedEx's gains.