The shares of FedEx Corporation (NYSE:FDX) fell nearly five percent after the company announced lower-than-expected second quarter 2015 financial results. FedEx Freight and FedEx Ground were the two units losing out on market expectations.
The courier service company announced its second quarter 2015 financial results with consolidated revenues of $11.9 billion along with operating income of $1.01 billion. The company improved its operating margin to 8.5% as compared to the last year quarter along with 23% improvement in its net earnings at $616 million.
FedEx Express segment was the largest contributor in revenue with revenues of $7.02 billion followed by FedEx Ground with revenues of $3.06 billion and FedEx Freight at revenues of $1.59 billion.
The CEO of FedEx Corporation (NYSE:FDX), Frederick W. Smith, said,
“FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments. We are in the final stages of this year’s peak shipping season, and I’d like to thank the more than 300,000 dedicated team members around the world for once again delivering outstanding service to our customers during the holidays.”
The shipping and courier company mentioned lower managing costs, falling pension expenses, and heightened export package revenue as the primary reasons behind improving profit margins. At the same time, FedEx Corporation (NYSE:FDX) has coordinated with online retailers to manage its shipments this year and avoid last year’s shipping disaster during the holiday season.
The analysts at Thompson Reuters I/B/E/S had net income expectations of $2.22 per share against the announced income of $2.14 per share. At the same time, the company fell behind revenue expectations of $11.99 billion. FedEx Corporation (NYSE:FDX) has announced a conservative target of earnings per share of $8.50 to $9.0 against the market expectations of $9.14.
The shares of FedEx Corporation (NYSE:FDX) are trading at $167.78 with a fall of $6.48 after the quarterly result announcements. The shares of the shipping company have improved by 16.7% year-to-date.
This article has been written by Prakash Pandey.