Shares of FedEx — arguably one of the best economic bellweathers around — are surging this morning.The company missed its earnings estimate by a penny, but its outlook is good.
Said CEO Fred Smith:
“Continued growth in the global economy is driving solid revenue gains in our transportation businesses. We expect strong demand for our services to boost our financial performance in our fourth quarter. ”
Analysts had been looking for Q4 earnings of $1.65. Here’s what they reported:
FedEx projects earnings to be $1.66 to $1.83 per diluted share in the fourth quarter and an adjusted $4.83 to $5.00 per diluted share for fiscal 2011. The company’s forecast assumes the current market outlook for fuel prices and continued moderate growth in the global economy. Earnings could be affected by the impact of the ongoing political turmoil in the Middle East and North Africa on fuel prices and the economy. Also, the near-term impact of the earthquake and tsunami in Japan on operational costs, shipping patterns and the global economy is currently uncertain. The annual guidance excludes FedEx Freight combination costs and a second quarter legal reserve. Including costs from the FedEx Freight combination and the legal reserve, earnings are expected to be $4.49 to $4.66 per diluted share for fiscal 2011. The company reported earnings of $1.33 per diluted share in last year’s fourth quarter. The capital spending forecast for fiscal 2011 remains $3.5 billion.
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