Stock markets have pushed sharply higher over the past few months, even though investors still remain uncertain about what the future will bring. Concerns about a potential recession are still weighing on investor sentiment even as major stock indexes have jumped.
With the Federal Reserve having chosen to leave interest rates unchanged last week and little in the way of economic data expected in the near future, many market participants are turning their attention back to corporate earnings. AI stocks have captured the attention of the entire market, and even though FedEx (FDX 0.12%) and Accenture (ACN -0.32%) might not be tech giants in their own right, both companies are aiming to take advantage of artificial intelligence to help businesses. Below, you'll get a closer look at what to expect from FedEx and Accenture this week.
Will FedEx bounce back?
FedEx is slated to release its latest financial report after the close of the regular trading session on Tuesday afternoon. The shipping giant has had to deal with a sizable slowdown in its operations already, but investors are hopeful that they'll start to see signs of an eventual recovery in the not-too-distant future.
Expectations from FedEx for its fiscal fourth-quarter report for the period ended May 31 are fairly low. Earnings projections are for FedEx to post a profit of $4.89 per share, which would be down markedly from $6.87 per share in the year-ago period. Similarly, revenue of $22.67 billion would be down more than 7% year over year (YOY).
FedEx has had to deal with a readjustment in consumer behavior over the past year, as people react to inflation by emphasizing experiences and services over goods. Given the e-commerce boom during the first two years of the COVID-19 pandemic, it's not surprising to see FedEx experience some reversion to the mean, but it doesn't make it any less painful for investors waiting for a recovery.
Yet shareholders have tried to have confidence that FedEx is moving in the right direction. The company has made cost-cutting measures to try to shore up its bottom line, and incorporating measures to boost efficiency should pay off in the long run. That won't necessarily produce quick results, but any evidence that FedEx has put the worst behind it will likely get a favorable reception.
Accenture offers AI help
Accenture expects to report its latest financial results on Thursday morning before the opening bell. The consulting company has a ton of experience in multiple areas, but artificial intelligence is getting all the attention this time around.
Investors have relatively modest expectations for Accenture in the fiscal third quarter, which ended May 31. Most see sales inching higher by about 2% YOY to $16.56 billion. Earnings of $3.04 per share would be up high single-digit percentages from the $2.79 per share Accenture earned in the year-ago period.
One problem that Accenture has faced lately is that many businesses haven't had the financial strength to invest as much in technological innovation as they have in the past. The hope, though, is that as signs of a strengthening global economy become more pervasive, those businesses will be increasingly willing to spend more on their IT budgets. That's an area with massive growth potential for Accenture.
Investors shouldn't necessarily expect Accenture or FedEx to experience huge spikes in their stock prices after releasing their latest reports. However, it's quite possible that a more optimistic assessment of their financial prospects could give a lift to the entire stock market. That's what bullish investors will hope to see from FedEx and Accenture in the coming week.
