FedEx fell more than 3% in extended transactions on Tuesday after lowering its outlook this year as shipping and logistics companies lowered their outlook this year as business costs rose more than expected due to supply chain disruptions and tight labor markets.
It reported revenue of $ 1.11 billion ($ 4.09 per share) in the first quarter, compared to $ 1.25 billion ($ 4.72 per share) in the year-ago quarter. Adjusting for temporary items, shipping and logistics companies earned $ 4.37 per share.
Revenues increased from $ 19.3 billion a year ago to $ 22 billion. FactSet’s consensus demanded $ 4.88 EPS for $ 21.93 billion in sales. Pre-market inventories fell about 6% on Wednesday.
“Despite the devastating impact of the pandemic on workforce availability and the global supply chain, strategy execution continues to be a service,” CEO Frederick W. Smith said in a statement. We are increasing the demand for
FedEx estimates that costs increased by approximately $ 450 million year-on-year due to inefficiencies, higher wage rates and higher transportation costs due to “labor market constraints”.
It was partially offset by higher yields, more expensive international shipping, and cheaper fuel, the company said.
FedEx “is in an unusual position to keep customers away and limit the number of customers,” said Patrick Donnelly, an analyst at Third Bridge.
“Even if pandemic restrictions are relaxed in some markets, the amount of e-commerce is expected to continue to grow as the industry is likely to be in record-breaking peak seasons,” he said. “This creates both opportunities and challenges for the company because it focuses on optimizing the revenue structure to improve profitability.”
FedEx said volume in commercial areas and US domestic express packages increased year-over-year, but “due to continued supply chain disruption, US domestic parcel demand slowed compared to the company’s previous forecasts.” ..
In addition, the situation in the first quarter was “more difficult than expected and is now expected to be even longer,” the company said.
FedEx led EPS between $ 18.25 and $ 19.50, compared to previous predictions that EPS would be between $ 18.90 and $ 19.90, prior to some severance pay accounting adjustments.
Excluding the costs associated with FedEx’s acquisition of TNT Express, the annual EPS was between $ 19.75 and $ 21, while EPS’s previous guidance was between $ 20.50 and $ 21.50.
The company said capital investment was fixed at $ 7.2 billion. FedEx said it expects “improved labor availability” in the second half of the fiscal year.
FedEx said late Monday Next year’s shipping charges will increase by an average of 5.9% Most services, and United Parcel Service Inc.
During the pandemic, demand for shipped goods continues to grow and may follow in the coming weeks.
In contrast to the S & P 500 index’s rise of about 16%, FedEx’s share has fallen by nearly 3% so far this year.
FedEx lowers this year’s outlook amid tight labor markets and rising costs
Source link FedEx lowers this year’s outlook amid tight labor markets and rising costs