It's been a year and a half since Motley Fool Stock Advisor stalwart FedEx (NYSE:FDX) last missed an earnings target. But when the company reports its numbers tomorrow morning, more will be at stake than just making it six-for-six on quarterly estimates. Tomorrow's numbers will also cover the end of FedEx's fiscal year 2006.

What analysts say:

  • Buy, sell, or waffle? Seventeen analysts follow FedEx, with nine voting buy and eight saying hold.
  • Revenues. Just like last quarter, analysts hope to see FedEx report 9% quarterly revenue growth tomorrow, and $8.4 billion in sales.
  • Earnings. Profits are predicted to rise 21% to $1.77 per share.

What management says:
CEO Fred Smith sums up FedEx's strategy for world domination "crisply" in the firm's last quarterly earnings release, as: ".balancing volume and revenue growth with cost containment to improve our margins."

What management does:
Bold words, and not easy to achieve for a firm that's seen one of its biggest operating costs, fuel, consuming increasingly large chunks of revenue. In fact, fuel costs have soared 45% so far this year. But by limiting most of its other operating costs to just single-digit increases in a year where revenues have increased 10%, FedEx has nonetheless managed to continue expanding its operating and net margins.

Margins %

11/04

2/05

5/05

8/05

11/05

2/06

Fuel costs as a percentage of sales

7.3

7.9

8.5

9.2

9.5

10

Operating

8.2

8.6

8.4

8.3

8.7

8.8

Net

4.8

4.9

4.9

4.8

5.1

5.3
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

The Fool says:
According to Fortune magazine, FedEx is the nation's No. 2 most-admired company (just behind GE (NYSE:GE) and just ahead of SouthwestAirlines (NYSE:LUV)). Here at the Fool, we also love the company. David Gardner, co-lead analyst at Motley Fool Stock Advisor and the man who picked FedEx for our portfolio, calls the company an "Untouchable" -- in a good way. A company that "short of a major strategic stumble or another company learning how to 'beam' packages a la Star Trek. should remain dominant in its niche."

I couldn't agree more.

Competitors:

  • ABX Air (NASDAQ:ABXA)
  • UPS (NYSE:UPS)
  • Office Depot (NYSE:ODP)
  • Staples (NASDAQ:SPLS)

Is past prelude? Could be. Just in case, you'd better read Stephen Simpson's write-up on FedEx's last quarterly earnings report.

Let David and Tom Gardner deliver results for your portfolio with a subscription to Motley Fool Stock Advisor . See their full list of picks with a free 30-day guest pass.

Fool contributor Rich Smith has no interest, short or long, in any company named above.