The package delivery organization is quite optimistic about the future as it reported better than expected earnings for the third quarter of fiscal year 2015.
After reviewing FedEx Corporation’s third quarter financial results on March 21, Argus upgraded the earnings per share (EPS) estimate for company’s fiscal year 2016. From an initial EPS estimate of $10.75, it got excited and upgraded it to $10.83 along with a Buy rating on the stock of the delivery company with a price target of $180.
The courier service organization announced its third quarter fiscal year 2015 earnings on March 16, 2015. In these recent earnings report, the company disclosed revenue earned through sales of $12.654 billion outperforming the analyst’s estimate by 2.37% which suggested the revenue generation to be at $12.361 billion. The net income reported by the company during the quarter was $691 million. It managed to outperform the analyst’s consensus in that respect too by 5.51% since they had estimated the delivery giant to report $654.938 million.
The chairman, president and CEO of the package delivery organization, Frederick W. Smith stated that the company’s financial performance is a reflection of the increase in demand for the business’s broad portfolio due to which we can witness an increase in revenue and adjusted profit of the corporation. He went on by appreciating the efforts of the company’s team members during the peak season who managed to give great service despite of the strong shipping demands which was driven by the growth in e-commerce.
The better-than-expected earnings were reported by the company owed to the impact made by the currency exchange rates along with the decline in fuel prices. Additionally, the company itself worked on better management initiatives. Other factors that contributed to the increase in earnings include the 7.3 million shares repurchase.
As for the guidance for fiscal year 2016, the delivery business decided to increase its adjusted earnings per share to in a range of $10.7 and $10.9 which was initially in the range of $10.4 to $10.9. Furthermore, the forecast for capital expenditure was also increased by almost $0.2 billion to $4.8 billion however it had previously announced capital expenditure on December 16 of $4.6 billion.
In contrast to that the chief financial officer Alan B. Graf. Jr. stated that for fiscal year 2016, the adjusted earnings per share are to be increased by 20% to 22% as the company had started to benefit from its profit improvement program. He added that this positively is to reflect in the upcoming 2017 fiscal year as well since the company is expecting solid growth in its cash flow and earnings.
FedEx Corporation stock is being traded in the market for a share price of $164.63 up by 0.56% with earnings per share of $4.07. Furthermore, the market capitalization of the delivery company is at $44.84 billion.
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