FedEx Raises Forecast Despite…

Good news for FedEx (FDX). The company raised its EPS range to $5 to $5.30 from $4.80 to $5.25. This is the third time that FedEx has raised its forecast.

The company reported earnings of 89 cents per share which is a drop from the $1.10 per share they earned a year ago. I like to follow FDX because I think this is a good indicator of the broader economy. (I’ve also said that FDX would be a better fit for the Dow than many of the current members.)

Excluding charges from a legal reserve and the combination of its freight and national LTL operations, earnings were $1.16 per share. The company in September had forecast earning $1.15 to $1.35 per share.

Revenue jumped 12% to $9.63 billion. Analysts were expecting $9.7 billion.

Sales in the express-shipping segment—FedEx’s biggest contributor to revenue—jumped 13% as international-priority average daily volume increased 11%, led by exports from Asia. U.S. domestic revenue per package rose 5% while average daily package volume increased 3%.

Revenue for the ground-shipping segment also rose 13%, as average daily volume rose 7%.

Freight revenue climbed 14%.

The CEO, Fred Smith, said: “We’re now more bullish about the remainder of the year.” I think this is good news for the economy. Several economists have been raising their forecasts for the fourth quarter. J.P. Morgan sees Q4 GDP coming in at 3.5% and Morgan Stanley is now up to 4.3%.

Posted by on December 16th, 2010 at 11:46 am


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