FedEx Corporation (NYSE:FDX) reported weaker-than-expected Q2 results and issued soft FY20 guidance.
Revenues came in a $17.3 billion, compared to $17.8 billion in the prior-year. Operating income lowered in the most recent quarter to $554 million from $1.17 billion in the prior-year quarter.
Net income also slumped to $560 million from the prior-year quarter’s $935 million. Diluted Earnings per Share came in at $2.13, compared to $3.51 in the prior-year quarter.
Net income includes a tax benefit of $133 million ($0.51 per diluted share) from the recognition of certain foreign tax loss carry forwards.
CEO Frederick Smith said, "Fiscal 2020 is a year of continued significant challenges and changes for FedEx, particularly in the quarter just ended due to the compressed shipping season.
"We have significantly enhanced our e-commerce capabilities with strategic initiatives including year-round seven-day FedEx Ground delivery, enhanced large package capabilities and the in-sourcing of FedEx SmartPost packages. These changes have been well-received by the marketplace as reflected in our record volumes this peak season."
The Memphis-based FedEx admitted Tuesday it was unable to forecast the fiscal 2020 year-end mark-to-market retirement plan accounting adjustment. As a result, the company is unable to provide a fiscal 2020 earnings per share or effective tax rate outlook on a GAAP basis.
FedEx now forecasts fiscal 2020 earnings of $9.10 to $10.35 per diluted share before the year-end MTM retirement plan accounting adjustment, and earnings of $10.25 to $11.50 per diluted share before the year-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses and aircraft impairment charges.
Shares tumbled $13.50, or 8.3%, in Wednesday’s first half-hour of trade to $149.73
