The stock rose 7% to $253 a share after hours. The stock is up 37% since early August and 4.4% in the past five days, but that didn’t hold back investors from snatching up shares post-earnings.
Here were the results against expectations:
- Revenue: $19.3B v. $17.55B (Actual: +13.5% year-over-year)
- Operating Margin: 8.5% v. 5.4% (Last year: 6.1%)
- Adjusted Earnings Per Share: $4.87 v. $2.70
"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 Chairman and CEO Frederick Smith. Management said the strong results were partially a result of high shipment volumes in one of its international businesses as well as its U.S. business. Fedex said health-related costs served as a drag on earnings, which does make the operating margin beat all the more impressive.
Fedex said “uncertainties” going forward “cloud” its ability to give forward-looking guidance, but the market is shrugging this off. Fedex’s performance is highly correlated to the economic recovery, so the company may have a difficult time forecasting in the current environment and in light of the pandemic.
TheStreet’s founder of Ponsi Charts and Managing Director at Barchetta Capital Management Ed Ponsi sa not only is the stock now too hot to buy, but that it’s running up against a key resistance level.
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