CAPEX.com
CAPEX.com

Article Hero

Labor costs bite into FedEx quarterly earnings

1632323034.jpg
Miguel A. Rodriguez
Miguel A. Rodriguez
23 September 2021
The fiscal first-quarter 2022 wasn’t as expected for one of the largest delivery companies in the world

FedEx reported an adjusted EPS of $4.37 on sales of $22 billion for the current quarter, while during fiscal Q1 2021, the company earned $4.87/share.

Moreover, labor-cost inflation seems to be biting into profit margins. Operating profit margins for fiscal Q1 2022 came in at 6.8% from the 8.5% reported a year ago. According to FedEx, because of a “constrained labor market,” the costs increased by $450 million.

Considering the increase in fuel prices and labor-cost inflation, FedEx is rising prices on November 1st to reflect their impact. The company’s guidance for fiscal 2022 also changed from an initial $21 per share earnings to $20.38 a share. Investors started worrying about slowing e-commerce growth.

The recent setbacks left their marks on the FedEx stock price, reflecting a 3% decrease since the beginning of the year, and trailing behind the returns of USA30 and USA500 of 11% and 16%, respectively.

Sources: barrons.com, marketwatch.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.