FedEx (FDX) raised its first-quarter earnings forecast, citing better-than-expected international shipments and cost-cutting. The announcement, unsurprisingly, coincides with other recent encouraging economic indicators – FedEx has long been regarded as a proxy for the overall economy.
The world’s second largest-package delivery company said it expects earnings for the quarter ended August 31 of 58 cents a share, down 53% from a year ago but well above the average analyst estimate of 44 cents per share. In addition, the company’s forecast for the subsequent quarter of 65 to 95 cents a share versus the current consensus of 70 cents, leaves some room for upside surprise.
CEO Alan Graf, Jr. said in a statement: “Despite some encouraging signs in the global economy, it is difficult to predict the timing and pace of any economic recovery. Revenue per shipment declined year-over-year in each of our transportation segments, as fuel surcharges declined significantly and we continue to face a very competitive pricing environment combined with significant overcapacity in the LTL freight market.”
FedEx is due to report full results on September 17.
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Peter J. Lazaroff, Investment Analyst
Friday, September 11, 2009
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