FedEx stock surged more than 4.4% in after-hours trading on December 16, 2021, after the company reported EPS and revenue beats.
FedEx Corp. Reports Higher Second Quarter Operating Income
FedEx reported Q2 adjusted EPS of $4.83 versus the consensus estimate of $4.28. The company reported Q2 revenue of $23.5B versus the consensus estimate of $22.47B.
“Our operating income increased during the quarter, thanks to the enormous efforts of our team members. We are nearing the finish line of another robust peak shipping season, and we salute our more than 600,000 team members worldwide for their dedication in delivering the holidays to our customers,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer.
FedEx board authorizes new $5B share buyback program
The FedEx Corp. Board of Directors has authorized a new $5 billion share repurchase program. The new program is in addition to the share repurchase program announced in 2016 authorizing the repurchase of up to 25 million shares, of which 2.3 million shares remain available for repurchase. As part of the share repurchase programs, the company intends to enter into a $1.5 billion accelerated share repurchase program. Approximately 80% of the shares to be repurchased under the ASR will be received by FedEx at the ASR agreement’s inception. The final number of shares to be repurchased under the ASR will be based on a discount to the average of the daily volume-weighted average stock prices for Rule 10b-18 eligible transactions in FedEx’s common stock during the term of the ASR. Purchases under the ASR are expected to be completed prior to the end of FedEx’s current fiscal year. FedEx may continue to repurchase shares in the open market from time to time subject to market and other conditions. The company has repurchased approximately $750 million of FedEx common stock fiscal year-to-date, and ended the quarter with $6.8 billion in cash.
UPS upgraded to Buy from Neutral at Citi
On December 15, 2021, Citi analyst Christian Wetherbee upgraded UPS (UPS) to Buy from Neutral with a price target of $250, up from $245. Parcel follows rail in the analyst’s preference order as he remains “quite confident about pricing power.” Wetherbee also expects volume comps to get easier as the year progresses, and says air cargo tightness should remain a tailwind through much of the year as capacity on long haul international lanes remains constrained. UPS now moves ahead of FedEx (FDX) in the analyst’s rankings, as believes the company’s “disciplined execution will yield steadier outperformance.”
FedEx Express Completes Major Expansion at Miami International Airport
On December 14, 2021, FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, recently completed a major expansion of its air cargo hub located at Miami International Airport. The expansion will increase capacity and capabilities at the company’s Americas gateway, which connects the U.S. and Canada to Latin America and the Caribbean.
The $72.2 million expansion adds more than 138,000 square feet to the main sort facility, bringing it to a total of more than 282,000 square feet. The enhancements include a new customs clearance area and a new 70,000-square-foot cold chain facility, the largest in the FedEx global network. The expansion will create hundreds of new jobs at the hub during the holiday shipping season.
“FedEx Express is proud to be one of the largest air cargo carriers operating out of Miami International Airport, and this expansion underscores our commitment to serving South Florida, Latin America and the broader world,” said Richard W. Smith, Regional President of The Americas and Executive Vice President of Global Support, FedEx Express. “The expansion of our Miami hub better positions us to meet growing customer demand and efficiently move increased e-commerce volume through our vast network.”
The expansion of the customs clearance area will help accelerate international operations as it will shorten the times throughout the entire customs clearance process. The cold chain facility is comprised of multiple rooms ranging from -13 degrees Fahrenheit to 77 degrees Fahrenheit that will accommodate growing demand for transportation of perishables such as flowers and food, as well as pharmaceuticals and therapeutics.
“Miami has always been critical to our operations, serving as our largest gateway connecting markets across North and South America,” said Juan Cento, Regional President, FedEx Express Latin America and the Caribbean. “The added cold chain capacities will enable us to expand verticals in the Latin American region that require refrigeration, and the new customs clearance space will help expedite trade in and out of the busy air cargo port.”
“FedEx Express’ expansion at MIA continues to grow Miami-Dade’s capacity for international trade and e-commerce, especially before the busy holiday shipping season, further positioning our County as a leader for cargo in the nation and the hemisphere,” said Miami-Dade County Mayor Daniella Levine Cava. “In addition to increasing MIA’s shipping and cargo capacity, FedEx Express’ larger hub is creating hundreds of jobs for Miami-Dade residents and growth opportunities for local businesses.”
Between 2019 and 2020, FedEx shipping volume through Miami-Dade County, Fla. grew by 30.9 percent. Planned capital improvement projects such as the expansion at Miami International Airport help enable the company keep pace with demand, while creating local jobs and economic activity in the community. Learn more about the FedEx Effect in Miami and throughout the United States.
“Congratulations to our partners at FedEx Express on the completion of their new Miami hub,” said Ralph Cutié, Miami International Airport Director and CEO. “As one of the busiest cargo carriers at MIA, their growth is a major reason why we are having by far our best year ever in total cargo volume.”
📺 FedEx plans to deliver 100 million more holiday packages in 2021 vs. 2019
CNBC’s Frank Holland joins ‘Squawk Box’ from a FedEx facility in Garden City, New York, to report on the holiday shipping surge hitting delivery companies.
📉 FDX Stock Technical Analysis
The long term trend is still negative, but the short term trend is neutral. It is advised to wait a little bit longer to see how this turns out. FDX is part of the Air Freight & Logistics industry. There are 16 other stocks in this industry, of which 82% are performing better than FDX. FDX is currently trading in the lower part of its 52 week range, which is not a good signal considering that the S&P500 Index is trading near new highs. Although the technical rating is bad, FDX does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. Very recently a Pocket Pivot signal was observed. This is another positive sign. Click here to sign up for email alerts on when FDX stock is a good long entry.