FedEx Corp. (NYSE:FDX)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibited a significant increase from 2531 million US dollars in 2020 to a peak of 7163 million US dollars in 2021. Following this peak, there was a decline to 5014 million in 2022, with a modest recovery observed in 2023 at 5421 million. However, the figures decreased again in 2024 and 2025, settling at around 4954 million and 4913 million, respectively. This pattern indicates volatility in operating profitability, with a notable peak in the second year and a gradual decline thereafter.

Cost of Capital

The cost of capital percentage showed an overall increasing trend from 10.25% in 2020, rising to 12.07% in 2021, then slightly decreasing to 11.24% in 2022. It rose again to 11.73% in 2023 and peaked at 12.32% in 2024, before decreasing to 11.34% in 2025. The fluctuations suggest changing perceptions of risk or financing costs over the years, with the highest cost observed in 2024.

Invested Capital

The invested capital consistently increased each year, starting from 57553 million US dollars in 2020 and reaching 70379 million by 2025. This steady growth, though relatively moderate year-over-year, suggests continuous capital investment or asset growth over the period under review.

Economic Profit

Economic profit remained negative throughout the entire period, indicating that the returns did not exceed the cost of capital. The losses narrowed significantly from -3370 million US dollars in 2020 to -587 million in 2021, implying an improvement in value creation relative to capital costs for that year. However, economic profit deteriorated again in subsequent years, with losses reaching -2455 million in 2022, and further worsening to -3700 million in 2024 before slightly improving to -3066 million in 2025. This trend reflects ongoing challenges in generating returns above the cost of capital despite fluctuations in operating profit.

Net Income

The net income exhibits a significant increase from 2020 to 2021, rising from 1,286 million US dollars to 5,231 million US dollars. Following this peak, there is a decline in 2022 to 3,826 million US dollars. The values then show a modest upward movement in 2023 and 2024, reaching 4,331 million US dollars, before dipping slightly to 4,092 million US dollars in 2025. This pattern suggests a period of volatility with an initial strong recovery followed by a stabilization phase with minor fluctuations.

Net Operating Profit After Taxes (NOPAT)

NOPAT follows a somewhat parallel trend to net income but with less volatility. It increases notably from 2,531 million US dollars in 2020 to a peak of 7,163 million US dollars in 2021. A decline is observed in 2022 to 5,014 million US dollars, after which it gradually decreases to 4,913 million US dollars by 2025. The downward trend in the last few years indicates some pressure on the core operating profitability despite the initial strong gain.

Provision for Income Taxes

The provision for income taxes shows a notable increase from 383 million USD in 2020 to a peak of 1,443 million USD in 2021, representing a substantial rise. This is followed by a decrease to 1,070 million USD in 2022. Subsequently, the provision increases again to 1,391 million USD in 2023, then slightly rises to 1,505 million USD in 2024, before declining to 1,349 million USD in 2025. The trend indicates volatility with overall growth compared to the initial year, suggesting fluctuating taxable income or changes in tax planning strategies over the period.

Cash Operating Taxes

Cash operating taxes have generally trended upward over the six-year period. Starting at 259 million USD in 2020, the figures increase sharply to 893 million USD in 2021 and continue to rise to 983 million USD in 2022. The upward trajectory continues through 2023 with 1,177 million USD and reaches the highest value of 1,885 million USD in 2024. In 2025, there is a decline to 1,626 million USD. The overall increase suggests higher actual tax payments, which might correlate with increased operating profits or altered tax compliance and payment profiles.

Comparison and Insights

Comparing the two items, cash operating taxes generally rise more consistently than the provision for income taxes, which shows more fluctuations. The significant jump in cash taxes from 2023 to 2024, contrasting with a steady rise in provision in the same period, might indicate timing differences or changes in tax payment schedules. The decline in both provision and cash taxes in 2025 could indicate a reduction in taxable income or enhanced tax efficiency measures.

The financial data over the six-year period presents several noteworthy trends in key capital structure metrics.

Total reported debt & leases

This metric shows a gradual increase from 36,121 million USD in 2020 to a peak of 38,332 million USD in 2023, followed by a slight decrease to 37,416 million USD in 2025. This pattern suggests a strategy of moderate leveraging with a plateauing effect in recent years, potentially reflecting cautious debt management or repayment activities after 2023.

Common stockholders’ investment

There is a consistent and significant upward trajectory in common stockholders’ equity, rising from 18,295 million USD in 2020 to 28,074 million USD in 2025. This increase indicates steady growth in the equity base, possibly driven by retained earnings accumulation or issuance of new stock, thereby strengthening the company’s capital foundation over time.

Invested capital

Invested capital demonstrates a steady upward trend from 57,553 million USD in 2020 to 70,379 million USD in 2025. The growth in invested capital parallels the increase in equity and debt levels, showing expansion in total capital employed by the business. The slower growth rate after 2023 suggests a stabilization in capital investment or asset base expansion.

Overall, the data indicates a balanced growth approach with incremental increases in both debt and equity financing contributing to a higher invested capital base. The stability in debt levels post-2023, combined with continuous growth in shareholders’ equity, may reflect strategic financial management aimed at optimizing capital structure and funding sustainable growth.

The analysis of the financial data over the reported periods reveals notable patterns and trends related to economic profit, invested capital, and economic spread ratio.

Economic Profit

The company has consistently experienced negative economic profit throughout the periods observed, indicating that the returns have not covered the cost of capital. While there was an improvement from a significantly negative value in 2020 (-3370 million USD) to a lesser negative figure in 2021 (-587 million USD), the trend reversed afterward, with economic profit deteriorating again in 2022 and 2023. The lowest point was in 2024, at -3700 million USD, followed by a slight recovery in 2025 to -3066 million USD. This fluctuation indicates challenges in generating value beyond the capital invested.

Invested Capital

Invested capital has shown a steady increase over the periods, growing from 57,553 million USD in 2020 to 70,379 million USD in 2025. This continuous growth suggests ongoing investments or capital deployment, possibly to support expansion, infrastructure, or other business operations. However, despite the increase in capital, the economic profit has not turned positive, implying that the additional investment has not yet achieved sufficient returns.

Economic Spread Ratio

The economic spread ratio, which measures the spread between return on invested capital and cost of capital, remains negative over all periods, demonstrating that the company’s operations have not generated adequate returns to cover the cost of capital. The ratio improved from -5.86% in 2020 to a less negative -0.91% in 2021, indicating some operational efficiency or improved profitability during that year. Nevertheless, subsequent years show a decline again, with the ratio worsening to -5.27% in 2024 before a modest improvement to -4.36% in 2025. This trend parallels the economic profit, reinforcing the persistence of value erosion despite growing capital investments.

Overall, the data highlights a continued challenge in achieving positive economic returns. The company's invested capital base has expanded steadily, yet this has not translated into sustainable positive economic profit or an economic spread above zero. The intermittent improvements suggest some underlying operational adjustments, but the prevailing negative economic spread and profit underscore the need for strategic reassessment to enhance capital efficiency and profitability.

Revenue Trend

The revenue of the company demonstrated an overall upward trajectory from May 31, 2020, to May 31, 2022, increasing from approximately 69.2 billion USD to 93.5 billion USD. However, in the subsequent years, there was a decline in revenue values, decreasing to around 87.7 billion USD by May 31, 2024, before showing a slight improvement to 87.9 billion USD by May 31, 2025. This suggests a peak in revenue in 2022 followed by some pressure on sales or service volumes in the following years, with a modest recovery toward the end of the period.

Economic Profit and Its Margin

The economic profit remained negative throughout the period under review, indicating that the company incurred costs exceeding its invested capital return expectations. Despite some fluctuations, the economic profit values showed a pattern of deterioration and partial recovery. Notably, the economic profit improved substantially from a large loss of approximately -3.37 billion USD in 2020 to -587 million USD in 2021, but then worsened again in the next three years, including a peak negative impact of -3.7 billion USD in 2024, before slightly improving to -3.07 billion USD in 2025.

Economic Profit Margin Analysis

The economic profit margin, reflecting the ratio of economic profit relative to revenue, was consistently negative over the period, reinforcing the observation that the company was not generating returns above its capital costs. The margin improved markedly from -4.87% in 2020 to -0.7% in 2021, which aligns with the economic profit improvement noted previously. After this improvement, the margin declined steadily over the next three years, reaching -4.22% in 2024, before recovering slightly to -3.49% in 2025. This pattern indicates that economic performance relative to revenue became more challenging after 2021, with some recovery toward the end of the timeline.

Overall Insights

The analysis of the data reveals a company experiencing significant fluctuations in economic profitability despite generally strong revenue growth in the initial phase. The temporary improvements in economic profit and margin in 2021 were not sustained, with profitability performance weakening in subsequent years. The sustained negative economic profit suggests challenges in converting revenue into true economic value, hinting at issues such as high costs, capital intensity, or inefficiencies. Modest improvements in the most recent year may indicate the beginning of stabilization or recovery efforts.