FedEx Corp. (FDX) Stock | Q1 Profit Falls Short

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FedEx Corporation (NYSE: FDX)

 

Earnings Report

Before the market opened today, FedEx Corp. (FDX) reported earnings that missed analyst estimates and sent the share price tumbling just over 5% in the premarket session. Earnings rose to $2.42 per share on $692 million in earnings, up from the same period a year ago at $2.26 per share but came up short on a per share basis, which was estimated by analysts at $2.45. Revenue was in line with analyst expectations at $12.3 billion, however full year guidance was lowered with an EPS range of $10.40-$10.90 down from $10.60 to $11.10. This is a result of weaker trucking industry demand and higher than expected insurance reserves and operating costs in the Ground business department. As a result, FDX plans to increase shipping rates starting Jan. 4th along with increased surcharges for shipments that exceed the published maximum dimensions in FedEx Ground network starting Nov. 2nd. This is in preparation for the busy holiday season that is right around the corner.

President and CEO of FedEx Services said,

“Overall, FedEx service levels are excellent, our culture remains strong and our balance sheet is solid. We remain confident FedEx is well-positioned to deliver long-term value for customers, shareowners and team members in FY ‘16 and beyond. As we said in the past and reiterate today, we are confident we can continue to increase margins, earnings per share, cash flow and returns on invested capital in the years to come.” SeekingAlpha

FDX is down just over 19% from the yearly highs of $185.19 as of the close today while the S&P 500 is only down 3% on the year, but analysts still remain bullish with a buy rating and an average price target of $193.65.

 

FDX Technicals

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Shares prices tumbled in the premarket session on the soft earnings release but were able to make a little bit of a comeback right before the market opened. FDX opened down just shy of 2% from yesterday’s close and quickly sold off again for most of the day on high volume to lows of $146.67 before shares staged a late day rally and closed at $149.40.

Looking at the bigger picture, FedEx has been a bit of a stagnant stock for most of the year but ever since it dipped below the 200d moving average back in July the stock has been in a steady down trend with lower lows and lower highs. Share prices hit highs of $185.19 back in early June with lows all the way down to $130 in late August, a 29.8% difference. The $148 level seems to be holding as support with $156 acting as a major level of resistance. There has been a bit of consolidation between these levels so we can expect a breakout to either side when the stock makes a move outside of this range. This chart has a bearish feel to it and with all major moving averages beginning to roll over I wouldn’t be surprised to see lower prices in the near future.

 

About FedEx Corporation

FedEx Corp. provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. It operates through four segments: FedEx Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers time-certain delivery to more than 220 countries and territories. This segment also includes FedEx Trade Networks, Inc., which provides international trade services, specializing in customs brokerage and global ocean and air freight forwarding; and FedEx SupplyChain Systems, Inc., which offers a range of supply chain solutions. The FedEx Ground segment includes FedEx Ground Package System, Inc., which provides small-package ground delivery services. This segment also includes FedEx SmartPost, Inc., which specializes in the consolidation and delivery of low-weight, less time-sensitive business-to-consumer packages using the U.S. Postal Service for final delivery. The FedEx Freight segment includes FedEx Freight, Inc., which provides less-than-truckload freight services across all lengths of haul, offering. This segment offers freight delivery service to most points in Canada, Mexico, Puerto Rico and the U.S. Virgin Islands and includes FedEx Custom Critical, Inc., which is a provider of time-specific, critical shipment services. The FedEx Services segment includes FedEx Corporate Services, Inc., which provides sales, marketing, information technology, communications and back-office support to other companies in the FedEx Group. This segment also includes FedEx TechConnect, Inc., which is responsible for customer service, billings and collections for its U.S. customers and offers technical support services; and FedEx Office & Print Services, Inc., which provides document and business services and retail access to its package transportation businesses. The company was founded by Frederick Wallace Smith on June 18, 1971 and is headquartered in Memphis, TN. MarketWatch

 

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