Remember when in what at the time was the ultimate #Ref! moment, in January UPS missed and guided lower due to a, drumroll, surge in business resulting from “an unprecedented level of online shopping that included a surge of last-minute orders.” Yes, not only was it the weather’s fault the company had a surge in business and shipments, but the company actually missed and guided lower due to this surge? Moments ago it was FedEx’ turn to miss Q4 revenues and earnings across the board, and to guide lower due to, what else, the weather.
- Q4 ESP was $1.23, Exp. $1.46
- Q4 revenues $11.3 billion, Exp. $11.43 billion
- Reduced full year EPS guidance: projects full year EPS of $6.55 to $6.80 for fiscal 2014.
Here is what the company scapegoated the miss on:
“Historically severe winter weather significantly affected our third-quarter earnings,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “On days when the weather was closer to normal seasonal conditions, our volumes were solid and service levels were high. The FedEx strategy of maintaining separate express and ground networks with multiple hubs proved to be an especially important advantage for our package customers during this quarter’s severe weather and peak shipping.”
But wait a minute, according to UPS the abnormal weather was a reason for surging shipments? Now FedEx is saying the opposite – so who’s lying?
Also, it wasn’t all weather. “Results also include a negative net impact from fuel.” Specifically, “Revenue decreased slightly due to lower freight revenue, lower fuel surcharges and the impact from weather. U.S. domestic revenue per package was up slightly, as higher rates and weight per package were mostly offset by lower fuel surcharges.”
Finally, one can surely attribute the fact that the company now plans to spend less CapEx in 2014 than earlier predicted – something we have been warning about for months – on the weather. To wit: “The capital spending forecast for fiscal 2014 is now $3.8 billion, down $200 million from the previous forecast.” Because one never invests in their business whn it’s snowing…