FedEx Corp. (NYSE: FDX) reported after the markets closed on March 17 $1.41 in diluted and adjusted earnings per share for its fiscal 2020 third quarter, down from $3.03 per share reported in the same period a year ago. The company pointed to demand weakness stemming from the global coronavirus pandemic added to challenges the company faced before the virus was detected in December 2019.
Operating income and margins were halved year-over-year, while net income fell to $371 million, a $426 million year-over-year drop. Revenue rose by $500 million to $17.5 billion. The figures included adjustments for a fiscal third quarter 2019 $90 million tax benefit, equal to $0.34 per share, from recognizing certain loss carry forwards, the company said. That was partially offset by a $50 million tax expense, or $0.19 per share, last year related to low tax rates in the Netherlands that were applied to deferred tax balances, the company said.
The earnings per-share figure came in roughly around analysts' consensus. FedEx's quarter ended on February 29.
FedEx said it was suspending its fiscal 2020 earnings forecast due to the uncertainties surrounding the COVID-19 outbreak. In mid-December, FedEx forecast fiscal 2020 earnings of $9.10 to $10.35 per diluted share before an accounting adjustment to its employee retirement plan, and $10.25 to $11.50 per diluted share before the accounting adjustment and excluding the costs of integrating its TNT Express operation and charges from aircraft "asset impairment," defined as a write-off of declining goodwill.
The quarterly results were affected by higher costs from expanded service offerings, the drain from losing the Amazon.com, Inc. (NASDAQ: AMZN) U.S. air and ground business during 2019, and a shift in mid- to lower-yielding services, all issues that the company was dealing with before the pandemic. FedEx said it benefitted from volume growth at its FedEx Ground unit, one additional operating workday, higher-yielding traffic from its FedEx Freight less-than-truckload (LTL) business, and the shifting of the "Cyber Week" post-Thanksgiving ordering bonanza to the first week of December.