Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and FedEx (FDX +0.35%) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
One of the most important signs of health for the global economy is whether goods are moving from place to place. FedEx obviously has a lot of insight into the workings of worldwide shipping, and its business not only reflects levels of economic activity but can also influence them. Let's take an early look at what's been happening with FedEx over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on FedEx
|
Analyst EPS Estimate |
$1.39 |
|
Change From Year-Ago EPS |
(10.3%) |
|
Revenue Estimate |
$10.85 billion |
|
Change From Year-Ago Revenue |
2.8% |
|
Earnings Beats in Past 4 Quarters |
3 |
Source: Yahoo! Finance.
Will FedEx deliver better results this quarter?
Analysts have gotten less secure about FedEx's earnings prospects lately, cutting $0.06 per share off their calls for the most recent quarter and $0.04 from their full fiscal year 2013 estimates. Yet the stock has had no such worries, rising 21% since mid-December.
FedEx has benefited greatly from the economic recovery generally and from the rise in online retail in particular. Rival UPS (UPS +0.55%) still shipped considerably more packages over the holidays than FedEx, but both companies have gotten their fair share of business. Woes at the U.S. Postal Service could eventually leave UPS and FedEx to fight over bigger slices of the overall industry pie, although for now, package volumes at the USPS have actually been fairly strong, thanks to partnerships like its SmartPost deal with FedEx.
FedEx got some good news in January, as regulators rejected UPS's bid to acquire European giant TNT Express on antitrust grounds. Although the European economy has struggled lately, a UPS/TNT combination could have left FedEx on the outside of what's likely to remain an important market once the current economic crisis in Europe subsides.
In its quarterly report, watch for FedEx to discuss the impact of its rate increases and those of UPS on its bottom line. As energy costs have remained high, FedEx's fuel-efficiency initiatives have the potential to produce more profits, and so watch overall costs to see if the company's efforts are paying off.
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