FedEx Q4 Results: Will falling demand pull share prices lower? Let’s Find Out!

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FedEx Q4FY23 results

FedEx Q4 results: Key insights

  1. FedEx to ground 29 more aircraft in the fiscal year starting June 1.
  2. FedEx blames a global shipping downturn and lack of demand for its services as the reason for weak revenues.
  3. FedEx plans to cut $4 billion in permanent costs by the end of its 2025 financial year.
  4. FedEx to buy back $2 billion of its common stock in the new fiscal beginning June 1, 2023. ‘
  5. Rival UPS shares also dropped following demand concerns affecting the sector. 

FedEx share price and FedEx results:

FedEx shares dropped 1% in after-market trading on June 20, 2023 and lost 3% in premarket trading on June 21, 2023 on the back of weak quarterly results as falling demand pushes the firm to adopt heavy cost cutting mechanisms.

FedEx shares lost 33% of its value in 2022, however is on track to regain most of its losses with share prices up 31% so far this year.

FedEx share historical performance:

1 Day1 Month1 Year5 Years

(Data as on June 20, 2023)

Decoding FedEx Q3 earnings:

FedEx Revenue

  • FedEx posted its third-straight drop in quarterly revenue during the three months ending May 2023, amid weakening demand after a pandemic-fueled boom in business cooled down.
  • FedEx’s express division that relies on airplanes for speedy deliveries, its Ground division known for delivering e-commerce packages for retailers like Walmart and in its Freight trucking division all witnessed a drop in volumes, leading to the drop in revenues. 
 Q4FY23Q4FY22% change
Total Revenue$21.9 billion$24.4 billion-10.2%

FedEx net profit

In FedEx’s fourth quarter, it reported a profit of $1.54 billion, or $6.05 a share, compared with a profit of $558 million, or $2.13 a share, in the same period a year earlier on account of heavy cost reduction tactics.

 Q4FY23Q4FY22% change
Net Profit$1.54 billion$558 million170%

FedEx dividend

FedEx returned $2.7 Billion to stockholders through Stock Repurchases and Dividends during FY23. However, FedEx board did not release any dividend for the quarter.

FedEx share price target

  • Renowned brokerage Bernstein raised its share price target on the stock to $284 from $261.  
  • Renowned brokerage JP Morgan raised its share price target on the stock to $251 from $228. 
  • Brokerage Raymond James cut its share price target on the stock to $270 from $280. 

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.