What drives FDX's EPS volatility quarterly?

FedEx's (FDX) EPS volatility quarterly is primarily driven by several key factors: 1. **Macroeconomic Conditions**: FedEx's EPS is influenced by the broader economic environment. In the third quarter of fiscal year 2025, the company's EPS was impacted by weak demand in the U.S. industrial sector and uncertainties exacerbated by trade tariffs imposed during Donald Trump's presidency. These macroeconomic factors can lead to fluctuations in demand for FedEx's services, thereby affecting EPS. 2. **Volume and Yield Variations**: The company's EPS is also driven by volume and yield variations in its different segments. For instance, in the third quarter, the Federal Express segment reported an increase in deferred package volume and improved yields, which contributed to the robust revenue growth in that segment. Conversely, the FedEx Freight segment experienced a decline in revenue due to lower shipments and fuel surcharges. These variations in volume and yield can significantly impact EPS. 3. **Cost Factors**: FedEx's EPS is influenced by cost factors such as purchased transportation and wage rates. The company has reported that increased purchased transportation and wage rates, along with higher business optimization costs, have impacted its operating income. These cost factors can compress margins and affect EPS. 4. **Strategic Initiatives**: The company's EPS volatility may also be driven by strategic initiatives. For example, the ongoing Network 2.0 optimization and the DRIVE program have contributed to cost savings and enhanced long-term profitability. The success and pace of these initiatives can impact EPS. 5. **One-Time Events**: Certain one-time events, such as the completion of a share repurchase plan, can also impact EPS. FedEx completed a $2.5 billion share repurchase plan in the third quarter, which benefited EPS by $0.12 per share. These one-time events can lead to fluctuations in EPS that may not be indicative of underlying business performance. In conclusion, FedEx's EPS volatility is driven by a combination of macroeconomic conditions, volume and yield variations, cost factors, strategic initiatives, and one-time events. These factors can lead to significant quarterly fluctuations in EPS.