FedEx’s TNT Acquisition is Paying Off, as Q1 Earnings Smash Expectations

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September 20, 2016 5:06pm NYSE:FDX

fedex-fdx-logoFedEx Corporation (NYSE:FDX) late today posted much better-than-expected fiscal Q1 earnings and raised its full-year earnings outlook, spurred by sharply higher revenues and a recent acquisition.


The Memphis-based company reported fiscal Q1 adjusted net income of $2.90 per share, easily beating Wall Street’s view of $2.78. Revenue surged 19.5% from last year to $14.7 billion, also topping estimates for $14.44 billion.

Looking ahead, FDX lifted its full-year earnings outlook to a range of $11.85-12.35 per share, up from $11.75-12.25. On average, Wall Street analysts are looking for $11.88 per share for the year.

FedEx is in the middle of integrating its big recent acquisition of TNT Express, which it expects will add significantly to earnings in coming years.

From the press release:

“The integration of TNT Express is proceeding smoothly, and the level of team members’ engagement is outstanding,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “Managing our operating companies as a portfolio of customer solutions helped FedEx achieve strong financial and operating results in the quarter, especially given the global economy’s continued low growth.”

“Our team is extremely excited about the TNT Express integration, and we are discovering many possibilities for achieving high returns,” said Alan B. Graf, FedEx Corp. executive vice president and chief financial officer. “As we integrate these networks and take advantage of the unmatched road capabilities of TNT Express, I am confident there is going to be a tremendous opportunity to increase the earnings of FedEx Corporation.”

FDX-2016-09-20

FedEx shares rose in after hours trading. Prior to today’s report, FDX had gained 9.17% year-to-date, easily eclipsing the S&P 500’s 4.67% return in the same period.


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