Analyst Note| Matthew Young, CFA |
Global integrator FedEx’s fiscal first-quarter 2021 (ended August) revenue jumped a very impressive 13% year over year; in stark contrast to the 2.5% decline posted last quarter, and well ahead of our forecast and consensus estimates. In short, the coronavirus pandemic has accelerated the broader shift to e-commerce sales, likely pulling forward years of B2C package growth and driving a massive spike in residential deliveries for ground. Also, Express’ international priority volumes saw a major lift from tight market capacity (limited commercial-airline belly space), which is boosting demand for FedEx’s airlift assets. Overall, these factors, along with nice yield gains at ground and freight, handily offset lower B2B package activity and lost Amazon revenue that was shed last year.