FedEx reports a loss, but revenue tops Street expectations

FedEx Corp. flipped to a $334 million loss in its fiscal fourth quarter, but its revenue and justed profit beat Wall Street expectations as virus pandemic continues to fuel a boom in online shopping.

FedEx's stock rose more than 9% in after-market tring following results report.

With many U.S. residents staying close to home, online shopping has picked up, and that helped drive a 20% increase in revenue for FedEx's ground-delivery business.

But deliveries to customers' homes are more costly and t as lucrative as deliveries between businesses, which have fallen sharply as businesses shut down — temporarily or permanently — since onset of pandemic.

Revenue in FedEx's core express-delivery unit fell 10% and operating income tumbled 56%. re were some bright spots, however. Express unit saw an uptick in flights across Pacific.

Matt Arld, an analyst for Edward Jones, said results were “better than feared," with expectations centered around weakness in business-to-business deliveries. Revenue in ground unit was much stronger than most analysts expected, he said.

“ surge in e-commerce volume was a pleasant surprise, even though it's a difficult business to make money in,” Arld said. “Those (residential deliveries) are t very profitable deliveries to make.”

FedEx did t offer a prediction about earnings in its fiscal year that started June 1. company based in Memphis, Tennessee, said uncertain speed of ecomic recovery from pandemic makes that kind of forecast impossible.

fourth-quarter loss equaled $1.28 per share. However, FedEx said that justing results to exclude write-downs because of temporary closures of FedEx Office stores and an accounting loss for changing value of retirement-plan investments, company said it would have earned $2.53 per share.

That beat aver forecast of $1.42 per share among nine analysts surveyed by Zacks Investment Research.

Revenue dipped 3% to $17.36 billion, but that too beat analysts’ aver prediction of $16.12 billion.

FedEx said it spent about $125 million on protective gear and extra cleaning services because of virus outbreak. company got a break on fuel costs, however, due to lower energy prices.

For fiscal year, FedEx reported profit of $1.29 billion on revenue of $69.22 billion. company plans to cut capital spending by $1 billion, to $4.9 billion, in new fiscal year.