Fedex Tumbles After Missing Revenue, EPS, Guiding Lower; Blames Hackers, Harvey

zerohedge.com / by Tyler Durden / Sep 19, 2017 4:57 PM

The earnings season is starting off on the back foot for global trade as moments ago, the company considered the world’s logistics bellwether, Fedex, reported revenue and earnings that both missed badly.

For the first quarter ended August 31, FedEx reported adjusted earnings per share of $2.51, that not only missed but also missed the lowest analyst estimate of $2.87 (going up as high as $3.20) and certainly the consensus of $3.00.  Of course, on a GAAP basis the number was far worse, just $2.19 in Q1. The first quarter earnings was a 11% drop from the $2.82 adjusted EPS reported a year ago. Fedex also reported Q2 revenue of $15.3 billion, an increase from $14.7 billion a year ago, but a miss to the $15.4 billion consensus estimate.

But wait, it gets better because while traditionally one-time, non-recurring items would be excluded from non-GAAP EPS, the reason for the huge miss is that while FedEx was happy to add back everything else, it decided not to do that to the real one-time items, such as Hurricane Harvey and the June 27 hack. Instead, FedEx blamed these for reducing non-GAAP EPS by $0.79 and $0.02 respectively, or a total of $0.81. In other words, if one were to use Non-Non-GAAP or also known as “super bullshit EPS”, Fedex earnings would be $3.32/share… when in reality they were $2.19. No surprise then that the market appears “cheap” when using non-GAAP numbers: they are all utter garbage.

Just as ironic, while Fedex said most TNT Express services resumed during the quarter and substantially all TNT Express critical operational systems have been restored; however, TNT Express volume, revenue and profit “still remain below previous levels”… as if the hack had nothing to do with this particular structural decline

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