FedEx: shares slide despite earnings beat
(CercleFinance.com) - FedEx Corp.
reported better-than-expected quarterly profit late on Thursday, lifted by a surge in e-commerce, but ground margins fell short of expectations, which sent its shares down.
The air-freight company posted net income of 1.3 billion dollars, or 4.83 dollars per share, for the second quarter ended 30 November. Earnings in the same period a year earlier were 660 million dollars, or 2.51 dollars per share.
Revenue grew more than 19% to 20.5 billion dollars, from 17.3 billion dollars a year ago.
However, the operating margin of the ground unit, where revenue mostly comes from carrying e-commerce packages, came in at 7.5%, below market expectations that were closer to 10%.
As a result, the shares were trading down 4% lower in early exchanges on Wall Street.
"We still view this as a potential buying opportunity, given that long-term fundamentals remain intact," one analyst noted.
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