Logistics powerhouse Federal Express (NYSE:FDX) reported on its fiscal third quarter Wednesday, and the numbers were not what analysts or shareholders were hoping for. It missed on profits and revenue, and lowered its guidance for the full fiscal year for the second time. But it's the drivers underlying those results and forecasts that are more important to investors.

In this segment of the MarketFoolery podcast, host Chris Hill and MFAM Funds' Bill Barker reflect on the external factors dragging on FedEx, such as a slowing global economy, trade wars, Brexit, and Amazon's looming encroachment on its turf. And they consider the internals -- the impact and costs of its TNT acquisition, and its other investments. With FedEX shares down about 30% from their peak, is the worst over? Is this a good time to buy in? It depends on how you squint at the data.

A full transcript follows the video.

This video was recorded on March 20, 2019.

Chris Hill: We've got to start with FedEx, though. We've got to start with the bellwether. FedEx reported after the market closed yesterday. Third-quarter profit and revenue came in lower than expected. They lowered guidance for the full year. By the way, that is the second time they've done that for 2019. Not surprisingly, shares of FedEx down 5% this morning.

Bill Barker: Yeah, falling on many other declines over the last half year or so. Down about 30% from its highs. As the story goes, the global market is showing signs of slowing, and FedEx very much is in the crosshairs of that. Additionally, the stock has been hurt by increased rumors and actions that Amazon is getting into the logistics and delivery space. There's not a lot of positive sentiment to start with, and the numbers today and the numbers predicted for tomorrow, there's nothing going the right way at the moment.

Hill: Nothing big is going their way at the moment, but Fred Smith, the CEO, talked about how some of the investments that they've been making are starting to pay off a little bit, particularly in Europe. They're also transparent about the fact that they're going to continue to make investments. I think that makes sense. I don't own shares of FedEx, but I look at this business which, over the long term, has been a great business to be a shareholder of, and I look at the stock -- it's down 30% from its high, which is about what it's done over the past year, basically down about 25%, 30%. I look at this, and the question to me is, is the worst of this over? If the investments that they've been making are starting to pay off, is this actually a good time to buy shares of FedEx? It'd be one thing if it was like, "Oh, it's down today because the valuation is sky-high and it's had this amazing run." No, it's had an amazing run over the long term, but over the last year, it's been knocked around.

Barker: It has been knocked around. The price is interesting, at about 10 times to 11 times next year's projected earnings. Let's focus on that important word, projected. Where is the future for this business? Is it something that you can assume is going to keep growing better than the pace of the global economy, or not? In terms of its acquisitions -- one of the things that is pointed to in the guidance, the outlook for next year, is that the company is predicting $15 to $16 a share in earnings -- as long as you don't look at a long list of stuff. So that's adjusted earnings. Included is the integration expenses of TNT Express, which is a Dutch-based logistics and delivery company which FedEx acquired a couple of years ago and for which it's still paying integration costs. So when Smith says these things are beginning to pay off, it depends, of course, on how you're measuring it. As long as you ignore the integration costs as a one-time thing, then yes, the revenues are higher. But it's left to those doing a little bit more work whether that was actually a great acquisition.

Hill: So they buy TNT, it was over a year ago. They're still paying the integration costs. Did Fred Smith talk at all about how much longer he expects that to go on? I mean, great CEO, great track record. I'm willing to give Fred Smith the benefit of the doubt. He's right that technically, it's a one-time cost. But if it's a one-time cost that they have to pay off for the next five years, then yeah, that swings the pendulum toward "this was a bad acquisition."

Barker: The guidance for fiscal year 2019 is that $15 to $16 a share range, excluding a bunch of things, including TNT Express. On a more GAAP basis, but still excluding some things, it's more in the $12-to-$13-a-share range. You'd want to get all those costs out of the way in fiscal '19 and say it was a one-time thing, rather than have this be ongoing. Whenever you take the costs, they're real. That's the point that companies want you to ignore. If you just pay attention to the adjusted earnings that we're going to present to you, you will see by squinting your eyes and tilting your head and looking at it in that way how good it is, rather than with your eyes wide open.

Hill: [laughs] So, to go back to the question that I asked earlier, is the worst of it over? Hearing what you just said, my conclusion is no, the worst of it is not over. FedEx would not be the first company to have a situation where they're dealing with costs and they're trying to get them out of the way, or essentially trying to contain them, within a single fiscal year. So, yeah, they're probably going to look to, in the next three months, get as many of these TNT integration costs taken care of.

Barker: Is the worst over -- I guess one question that I would start with is, Tell me what's going to happen with Brexit. As long as you can answer that, then I can help get you to a better understanding of whether the worst is over. Given that neither one of us really knows what's going to happen next with Brexit -- which puts us in the large group of people which is defined by everybody -- you don't become a global player and get all the benefits of acting on a global scale without suffering some of the consequences when parts of the world are underperforming. In terms of what FedEx is putting out right now, it's pointing more toward Europe and Asia as part of that. So, yeah, Europe has slowed down. A lot of companies are pointing that out today. UPS is another one making that claim. The last quarter, you had some bigger weather events than usual. There are always some in the winter, but I think this last quarter was particularly bad. You had the government shutdown. You've got the doubts about Brexit. It's all a bit of a challenge at the moment. So I don't know that it's going to have a quarter as challenging as the last one. That said, the U.S. economy was still growing pretty well over the last quarter.

Check out the latest earnings call transcript for FedEx.