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FDX NYSE· Fedex Corp
Earnings report Q4 2023

FDX Reports Decrease in Revenue for the Latest Quarter

Segments of revenue

FDX's revenue decreased by 3% in the second quarter and 5% in the first half of 2024. This decline was primarily driven by lower fuel surcharges across all transportation segments and volume declines at FedEx Express and FedEx Freight. However, there was a base yield improvement at FedEx Ground and FedEx Freight.

  • FedEx Express segment: Revenue decreased by 6% in the second quarter and 8% in the first half of 2024. This decline was mainly due to lower volume, lower fuel surcharges, reduced demand surcharges, and unfavorable international service mix.
  • FedEx Ground segment: Revenue increased by 2% in the second quarter and 4% in the first half of 2024. This growth was primarily driven by base yield improvement, partially offset by lower shipments, fuel surcharges, and weight per shipment.
  • FedEx Freight segment: Revenue decreased by 4% in the second quarter and 10% in the first half of 2024. This decline was primarily due to lower shipments, fuel surcharges, and weight per shipment, partially offset by base yield improvement.
  • Corporate, other, and eliminations: Revenue decreased during the second quarter and first half of 2024 primarily due to lower yields at FedEx Logistics, Inc.

Strengths

FDX's operating income improved by 9% in the second quarter and 17% in the first half of 2024. This improvement can be attributed to the successful execution of their DRIVE program initiatives and their continued focus on revenue quality. The DRIVE initiatives included increasing linehaul efficiencies and improving dock productivity at FedEx Ground.

Challenges

FDX faced reduced demand for their services, primarily resulting from challenging macroeconomic conditions. This led to a decrease in average daily shipments by 5% in the second quarter and 9% in the first half of 2024. Lower fuel surcharges also contributed to the decline in revenue.

Noteworthy

FDX's revenue decline was partially offset by base yield improvement at FedEx Ground and FedEx Freight. Additionally, the company's operating income was negatively impacted by reduced demand and lower fuel surcharges.

Summary

FDX reported a decrease in revenue of 3% for the latest quarter, primarily driven by lower fuel surcharges and volume declines. However, the company's operating income improved due to the successful execution of their DRIVE program initiatives and focus on revenue quality. FDX faced challenges from reduced demand and lower fuel surcharges, resulting in a decline in average daily shipments. Overall, FDX's performance reflects the impact of macroeconomic conditions on their business.

Source documents

Form 10-Q  filed on Dec 19, 2023
79 pages scanned

Reference data

Company financials Q4 revenue 22.17B
Analyst estimates Q4 EPS missed by -5.01%
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