Record revenues didn't help

FedEx reported quarterly results that beat analysts' estimates and summed up a record earnings year. However, investors see serious cause for concern.

Shares in FedEx (FDX), one of the largest international delivery companies, fell 4% in after-hours trading following the release of its financial report.

FedEx reported results for the fourth quarter ended 31 May:

• earnings per share rose to $5.01, up $0.02 from analysts' estimate of $4.99;
• quarterly earnings more than tripled to $1.87 billion from last year's $663 million;
• revenue rose 30% to $22.57 billion, compared with an analyst estimate of $21.51 billion.

For the full fiscal year 2021, FedEx reported outstanding results and that earnings per share of $18.17 versus last year's $9.5, annual earnings of $4.89 billion versus last year's $2.49 billion, and total revenue of $84 billion versus last year's $69.2 billion.

FedEx forecast

FedEx expects fiscal 2022 earnings per share to be between $18.90 and $19.90 per share less than analysts' average estimate of $20.37. At the same time, the company said it could not provide an annual earnings forecast.

FedEx also said it will increase capital spending by 22% this year to increase the capacity of its network and prepare for the peak shipping season later in the year.

The company plans to spend $7.2bn to expand capacity, upgrade its fleet and increase its use of automation. In each of the last two fiscal years, FedEx has spent about $5.9 billion on capital spending.

FedEx shares have risen nearly 17% since the start of 2021, rising 124.8% in the past 12 months.