Mega Bellwether FedEx Announces Earnings Tomorrow And They Can't Afford To Miss

fedex plane

Photo: Patrick Hashley / Flickr

FedEx is one of the most reliable global economic bellwethers, and they’ll announce quarterly earnings tomorrow morning.Analysts expect the freight transport behemoth to deliver earnings of $1.40 per share on $10.7 billion in revenue.

Everyone is hoping that FedEx will report financial results at least in line with expectations because it was only two weeks ago that management cut guidance.

“Earnings during the quarter were lower than originally forecast, as weakness in the global economy constrained revenue growth at FedEx Express more than expected in the earlier guidance,” wrote management in a September 6 statement.

At the time, management reduced earnings guidance to a range of $1.37 to $1.43 from a prior range of $1.45 to $1.60.

Morgan Stanley’s transportation analysts, however, are optimistic about the company’s prospects.

“We believe FDX is at the beginning of a multi-year growth cycle similar to FY03-FY07,” they write.  “Margins remain well below peak with a number of tailwinds (int’l mix, loss of DHL, yield mgmt, LTL restructuring, greater use of JIT, etc.) to go along with cyclical recovery.”

But they warn that as a global trade play, FedEx is particularly vulnerable to growth shocks.  They also note that rising energy prices could eat into profit margins.

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