One of the best proxies for economic activity, FedEx (FDX), tells us something we already know: 2009 is going to suck. What’s astounding is the range:
FedEx Corporation (NYSE: FDX – News) today announced that it expects to report earnings of $1.58 per diluted share for the second quarter ended November 30. Previous earnings guidance for the quarter was $1.40 to $1.60 per diluted share. For fiscal 2009, the company has reduced its earnings guidance to $3.50 to $4.75 per diluted share from the previous guidance of $4.75 to $5.25, as significantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market. This outlook assumes stable fuel prices.
That’s a pretty big range, and it’s really striking in light of the two modifiers: lower fuel prices and reduces competition. That was one of two big warnings after hours, the other being Texas Instruments (TXN) which drastically pulled down revenue estimates.