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FedEx Corp reported after the close on Tuesday beating expectations giving us insight into the economy and the threats from online retail giant $AMZN and rivals $UPS and DHL. $FDX had suffered a backlash for its NRA discounts after the Parkland shootings.

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FedEx has been a star of the the bull market rally this year but now appears threatened.

Earnings Beat Consensus Forecast

FedEx reported $3.72 in earnings per share (EPS) on $16.52 billion in revenue, beating expectations solidly. The same period of last year reportedly had EPS of $2.30 and $15.0 billion in revenue. For the fiscal third quarter analysts expect EPS to rise30% to $3.06 on revenue growth of 8% to $16.18 billion.

Reaction: FedEx Corp NYSE: $FDX

March 21, 10:09 AM EDT $254.85 ▲ 2.83 (1.12%)

Segments

  • FedEx Express Segment has revenues of $9.37 billion.
  • FedEx Ground Segment reported revenues of $5.22 billion.
  • FedEx Freight Segment has $1.65 billion in revenue.

Execution of our long-term growth strategies, customer demand for the unique value of our broad portfolio of solutions and healthy growth in the global economy are driving our performance. We expect strong operating performance in each of our transportation segments in the fourth quarter. - Frederick W. Smith, FedEx board chair and chief executive

We are increasing our fiscal 2018 earnings outlook due to foreign tax benefits from our international corporate structure, the benefits from U.S. tax reform and improved operating performance. We remain committed to improving operating income at the FedEx Express segment by $1.2 to $1.5 billion in fiscal 2020 versus fiscal 2017. CFO Alan B Graf said

Outlook

Looking ahead to the coming fiscal year, the company expects to see EPS in the range of $15.00 to $15.40. The consensus estimates call for $13.61 in EPS on $64.62 billion in revenue for the fiscal full year.

We are increasing our fiscal 2018 earnings outlook due to foreign tax benefits from our international corporate structure, the benefits from U.S. tax reform and improved operating performance. We remain committed to improving operating income at the FedEx Express segment by $1.2 to $1.5 billion in fiscal 2020 versus fiscal 2017. CFO Alan B Graf said

This story has been updated with the com-anies earnings results

Earlier Preview:

Barclays Brandon Oglenski expects FedEx to raise the capital spending outlook as management contemplates a refocused competitor in UPS, attractive US tax incentives and robust ecommerce and airfreight market opportunities. While bullish investors could initially be disappointed by another extended period of low cash conversion, Brandon suspects that a strong revenue outlook coupled with guidance for margin improvement should assuage many long-term fears. (FedEx Corp.: Spending Won’t Be Ending, 5 Mar 2018)

FedEx is in a position strong guidance to get one up over it's rival United Postal Service. $UPS has been dealing with delays since 'Cyber Monday'. Howevee they have both been hit by the NRA discount fallout since the Parkland Florida school shooting that left 17 people dead.

With $AMZN the darling of the rally $FDX earnings will be watched in regard to Amazon competition. Like the rest of the market you have to ask yourself are prices ahead of themselves however?

Finally European powerhouse DHL has announced it plans to expand its North American operations. Analysts will be watching for any guidance on these three key developments.

Previous Earnings

$FDX closed Friday at $252.03 and has a 52-week range is $182.89 to $254.12.

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