FedEx Corp. (NYSE: FDX): Q3 Earnings Peview 2011

FedEx Corp. (NYSE: FDX), the world's second-largest package delivery company, is scheduled to release fiscal third quarter earnings before the opening bell on Thursday, March 17, 2010. Analysts, on average, expect the company to report earnings of $0.83 per share on revenue of $9.62 billion. In the year ago quarter, the company reported earnings of $0.76 per share on revenue of $8.70 billion.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. Shipping firms such as FedEx and rival United Parcel Service (NYSE: UPS) are often considered a bellwether for the U.S. economy because the strength of their businesses serves as a useful gauge of activity in the broader economy. 

In the preceding second quarter, the Memphis, Tennessee-based company's net income was $283 million or $0.89 per share, compared with a profit of $345 million or $1.10 per share in the previous year. Excluding charges, second-quarter earnings were $1.16 per share compared with $1.10 per share a year ago. Revenues for the quarter grew 12% to $9.63 billion from $8.60 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.31 per share on revenue of $9.70 billion. 

Early in February, the company slashed its fiscal third quarter earnings guidance, citing loss of revenue and increased expenses on severe winter storms and higher-than-expected fuel prices. The company said that it currently expects adjusted earnings, excluding FedEx Freight combination costs, in the range of $0.70 to $0.90 per share for the third quarter, compared to the previous forecast in the range of $0.95 to $1.15 per share. "We experienced significant network disruptions in the U.S. and Europe and unusually high costs from severe winter storms. In addition, fuel prices continued to escalate since we provided our earnings outlook in December," said Alan Graf, FedEx Corp. executive vice president and chief financial officer. FedEx freight combination costs for the quarter are expected in the range of $0.12 to $0.08 per share. These costs will also impact earnings guidance for the full year, which the company will update when it announces third quarter earnings on March 17, 2011.

However, Mr. Graf said FedEx continued to experience strength in its business across all transportation segments and geographic regions. The company and its larger rival, United Parcel Service, are bellwethers of global economic health because the strength of their businesses serves as a useful gauge of activity in the broader economy. 

In recent weeks, spiking oil prices amid political turmoil in North Africa and the Persian Gulf have taken a bite out of FedEx's share price. However, FedEx is well positioned to benefit from improving freight demand and faster-than-expected economic recovery. It's margins are expected to improve as economic health is a key determinant of package volumes. An economic recovery is almost always accompanied by improved business spending, and shipping is at the core of that.

Full Disclosure: None.

FedEx Corp. (NYSE: FDX): Q2 Earnings Preview 2011

FedEx Corp. (NYSE: FDX) is scheduled to release fiscal second quarter earnings on Thursday, December 16, 2010. Analysts, on average, expect the company to report earnings of $1.31 per share on revenue of $9.70 billion. In the year ago quarter, the company reported earnings of $1.10 per share on revenue of $8.60 billion.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. Shipping firms such as FedEx and rival United Parcel Service (NYSE: UPS) are often considered a bellwether for the U.S. economy because the strength of their businesses serves as a useful gauge of activity in the broader economy. 

In the preceding second quarter, the Memphis, Tennessee-based company's net income was $380 million, or $1.20 a share, compared to $181 million, or 58 cents a share, in the year-earlier quarter. Revenue climbed 18% to $9.46 billion. Analysts, on average, expected the company to report earnings of $1.20 per share on revenue of $9.41 billion. 

At its last earnings call in September, the company said that it anticipates second-quarter GAAP earnings to be in the range of $097 to $1.21 per share and non-GAAP earnings of $1.15 to $1.35 per share. The company also boosted its fiscal 2011 guidance. FedEx said that it now anticipates earnings to be $4.80 to $5.25 per share for fiscal 2011, up from the company's prior outlook of $4.60 to $5.20 per share. GAAP Earnings are expected to be $4.40 to $4.95 per share for fiscal 2011.

Further, FedEx said it will combine its FedEx Freight and FedEx National LTL operations effective January 30, 2011, aiming to increase efficiencies and reduce operational costs. The combination is expected to result in headcount reduction by about 1,700 full-time employees, and the company will close approximately 100 facilities.

FedEx announced recently that Monday, December 13, 2010 was the busiest day in the company's history as drivers hit the road to pick-up almost 16 million shipments around the world. This volume represents an increase of nearly 13 percent from last year's busiest day and is double the volume handled on an average day in the FedEx network. FedEx expects to move more than 223 million shipments in its global networks between Thanksgiving and Christmas--a year-over-year increase of 11 percent. During the week of December 13, also the busiest week of the year for FedEx, the company expects to move more than 63 million shipments compared to last year's busiest week of 57.5 million shipments. 

In December, the company said that it will raise shipping rates for its FedEx Ground and FedEx Home Delivery by a net average of 4.9% from January 3, 2011. 

Among other developments, the company recently agreed to acquire the logistics, distribution and express businesses of India-based AFL Pvt. Ltd. and its affiliate, Unifreight India Pvt. Ltd. FedEx expects the deal to close in its third fiscal quarter, which ends February 2011, subject to customary closing conditions.

FedEx is well positioned to benefit from improving freight demand and faster-than-expected economic recovery. It's margins are expected to improve economic health is a key determinant of package volumes. It is also poised to benefit from the turmoil at the U.S. Post Office as  reliability and efficiency concerns continue to come under scrutiny.

In terms of stock performance, FedEx shares are up nearly 17% since the beginning of the year.

Full Disclosure: None.

FedEx Corp. (NYSE: FDX): Q3 Earnings Preview 2010

FedEx Corp. (NYSE: FDX) is scheduled to release financial results for the fiscal third quarter on Thursday, March 18, 2010. Analysts, on average, expect the company to report earnings of 71 cents per share on revenue of $8.30 billion. In the year ago quarter, the company reported earnings of 31 cents per share on revenue of $8.14 billion.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services

Shipping firms such as FedEx and rival United Parcel Service (NYSE: UPS) are often considered a bellwether for the U.S. economy because the strength of their businesses serves as a useful gauge of activity in the broader economy. The company was hit hard by the severe global economic recession amid reduced demand for package shipments. In the preceding second quarter, the Memphis, Tennessee-based company reported net income of $345 million or $1.10 per share, 30% lower than $493 million or $1.58 per share in the prior-year quarter. Quarterly revenue decreased 10% to $8.60 billion from $9.54 billion in the same quarter last year. Analysts, on average, expect the company to report earnings of $1.06 per share on revenue of $8.46 billion.

The company noted that earnings and revenues declined due to lower yields, primarily due to a substantial decline in fuel surcharges. Over the last year, the company cut jobs, slashed salaries, instituted hiring freeze and suspended contributions for employees’ 401(k) retirement accounts in response to the worst recession in decades. The company expects to save about $3 billion by the end of fiscal 2010 in May from cost cuts made since June of 2008.

During a conference call in December, chairman, president and chief executive officer, Frederick Smith said, "Positive momentum in the global economy and continued execution of our business strategy drove volume growth across all FedEx transportation segments, highlighted by increased international shipments. We have taken decisive actions during the economic downturn to reduce expenses while expanding our networks in growth markets." Executive vice president and chief financial officer Alan Graf added "Our balance sheet is strong, volumes are growing, and we are encouraged by our performance as we emerge from the worst economic downturn in FedEx history. While there is some uncertainty regarding the sustainability of current demand trends after our peak shipping season, we expect our strong operating leverage to provide improved year-over-year profitability in the second half of our fiscal year."

For the third quarter, FedEx expects earnings in a range of $0.50 to $0.70 per share. For fiscal 2010, the company anticipates earnings in the range of $3.45 to $3.75 per share. The company noted that the forecast reflects the current market outlook for fuel prices and a continued modest recovery in the global economy.

FedEx is well positioned to benefit from faster-than-expected economic recovery. It's margins are expected to improve economic health is a key determinant of package volumes. It is also poised to benefit from the turmoil at the U.S. Post Office as budget issues as well as reliability and efficiency concerns continue to come under scrutiny," the note added.

Recently, Fortune magazine ranked FedEx Corp. among the top 20 most admired companies in the world for the 10th consecutive year. Fortune cited the ability of FedEx to manage costs while maintaining service levels during the economic downturn, and increased demand in international business, especially in Asia and Latin America, as enhancing the corporation’s overall reputation for reliable deliveries.

Among other developments during the quarter, the Board of Directors of FedEx Corporation declared a quarterly cash dividend of $0.11 per share on FedEx Corporation common stock. The dividend is payable April 1, 2010 to stockholders of record at the close of business on March 11, 2010.

The company's stock currently trades at a forward P/E (fye 31-May-11) of 18.01 and PEG Ratio (5 yr expected) of 3.36. In terms of stock performance, FedEx shares are up 107% over the past year.

Full Disclosure: None.

FedEx Corp. (NYSE: FDX): Second Quarter Earnings Preview 2010

FedEx Corp. (NYSE: FDX) is scheduled to release financial results for the fiscal second quarter ended November 30 on Thursday, December 17, 2009. Analysts, on average, expect the company to report earnings of $1.05 on revenue of $8.46 billion. In the year ago quarter, the company reported earnings of $1.58 per share on revenue of $9.54 billion.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services.

Shipping firms such as FedEx and rival United Parcel Service (NYSE: UPS) are often considered a bellwether for the U.S. economy because the strength of their businesses serves as a useful gauge of activity in the broader economy.The company was hit hard by the severe global economic recession amid reduced demand for package shipments. In September, the package delivery giant reported that its fiscal first quarter net income slumped 53% to $181 million or $0.58 per share, from $384 million, or $1.23 per share, in the year-ago quarter. Quarterly revenue plunged $8.01 billion from $9.97 billion in the prior year quarter. Analysts, on average, expect the company to report earnings of $0.58 per share on revenue of $8.24 billion.

The management attributed the positive quarterly results to better-than-expected FedEx International Priority volume and strict cost controls. Over the last year, the company cut jobs, slashed salaries, instituted hiring freeze and suspended contributions for employees’ 401(k) retirement accounts in response to the worst recession in decades. The company expects to save about $3 billion by the end of fiscal 2010 in May from cost cuts made since June of 2008.

Early in December, the Memphis, Tennessee-based company boosted its second quarter earnings guidance. The company now expects to report earnings of $1.10 per share for the second quarter, up from its prior estimate in the range of $0.65 to $0.95 per share and down 30% from $1.58 per share a year ago.

The company said that it benefited significantly from rapidly declining fuel prices. "FedEx will exceed previous earnings guidance in the second quarter primarily due to better-than-expected growth in FedEx International Priority and FedEx Ground volumes, coupled with the benefits of our continuing cost control programs," said Alan Graf, FedEx Corp. executive vice president and chief financial officer. He said further that year-over-year growth in the company's U.S. overnight express and FedEx International Priority services increased each month during the quarter, aided by inventory restocking and the company's sales efforts. He added that demand for the company's international services has improved significantly since the first quarter, particularly in Asia and Latin America.

FedEx also said that its capital spending forecast remains $2.6 billion, and added that FedEx Express will increase shipping rates by an average of 5.9% for U.S. domestic and U.S. export services, effective January 4, 2010.

The company also said it will raise shipping rates for its Ground and Home Delivery units by an average of 4.9 percent in 2010 — 1 percentage point less than this year's rate hike.
FedEx announced in September it will increase shipping rates for Express packages shipped within or from the U.S. by an average of 5.9 percent in 2010, also 1 percentage point lower than FedEx's rate increase this year.

Fedex is also upbeat on holiday shipping despite recession's hangover. It expects to ship more than 13 million packages on Dec. 14, the day it anticipates will be its busiest of the year. If the prediction holds, it would result in an 8% increase compared its busiest day of 2008, when it shipped 12 million parcels.

FedEx is well positioned to benefit from faster-than-expected economic recovery. It's margins are expected to improve economic health is a key determinant of package volumes. Last month, the Commerce Department reported that the US economy grew at a 2.8 percent annual rate. It was the fastest pace since the third quarter of 2007. According to the International Air Transport Association, global air-freight volumes were down 0.5% in October, a significant improvement from the start of this year when they dropped more than 20% in some months.

In terms of stock performance, FedEx shares are up 41% since the beginning of the year. Shares of the company rose $2.62 or 2.98% to close at $90.56 on Monday.

Full Disclosure: None.