This is one of the biggest declines of the day in New York. FedEx, the express delivery giant, lost 5%, bringing its decline to nearly 17% since the start of the year, in reaction to the publication of quarterly accounts deemed disappointing. The cause ? Rising costs related to a labor shortage in the United States and lower-than-expected parcel volumes, which could not compensate for price increases.
In the third quarter of its 2021-2022 fiscal year, ending at the end of February, FedEx certainly presented a turnover slightly higher than the consensus forecasts (23.6 billion dollars against 23.5 billion anticipated), but, in the same At the time, earnings per share were $4.59, below expectations of $4.65. It nevertheless remains a strong improvement compared to the 3.47 dollars of the comparable quarter a year earlier.
Uncertainties on “many fronts”
For the full year, guidance is maintained for unit profit in the range of $20.50 to $21.50, but the environment will remain difficult in terms of ground deliveries of the business.
” Although we are confident in our ability to deliver a strong fourth quarter, uncertainty remains on many fronts, whether on the virus pandemic, the labor market, inflation, high oil prices energy, but also geopolitics “warned CFO Michael Lenz during a conference call. The Russian military offensive started just 4 days before the end of the group’s third quarter.
Analysts review their targets
If FedEx manages to compensate for soaring energy costs by price increases for customers, the situation is different for the recruitment of employees, particularly in sorting centers. This forced him to transfer part of this activity to more operational sites, with additional costs involved.
Following this publication, many analyst firms lowered their price target for the title. This is the case of Morgan Stanley, which remains at “line weighting” to target only $250, against $260 previously, and which underlines that the eyes are now turned towards the day of June 28, when management will hold a great investor day. Barclays lowers its target price from $345 to $320. Citigroup is now only targeting $270 (300 previously), Wells Fargo $277 (314) and Stephens $285 (345).