FedEx Q4 Earnings: What To Expect
FedEx (NYSE: FDX) will announce its Q4 earnings on Tuesday, June 21st. In the previous two quarters, the company showed a steady year on year (y-o-y) increase in its revenues. We expect that trend to continue this quarter. Despite the expected increase in the revenue figures, the company’s bottom line is likely to see some pressure, primarily due to the costs related to the TNT acquisition and the settlement of lawsuits.
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Revenue Growth
The Express segment and the Ground segment, which are the primary revenue drivers for the company, are expected to show single digit growth on a y-o-y basis. This will be primarily driven by a few factors. First, the e-commerce industry, a major source for revenue for both segments, is expected to grow at 16% in 2016. [1] This growth should boost revenues for both divisions. Additionally, the integration of GENCO into the FedEx Ground segment will add to the revenues for the division.
The company also expects margins to improve during the quarter, driven by low fuel prices and subsequent low fuel surcharges. The measures taken to improve pricing – such as additional surcharges on oversized packages and introducing extended dimensional pricing – along with favorable currency exchange rates will significantly impact revenues.
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- Global Retail E-commerce Keeps on Clicking, AT Kearney Report, 2015 [↩]