FedEx Corporation (NYSE: FDX)
Earnings
After the market closed today, FedEx Corp (FDX) announced second quarter earnings that beat analyst estimates and pushed shares higher in the post market session. FDX earnings per share climbed to $2.44 on $691 million in earnings, up from $663 million for the same period last year. Revenue, which came in 5% higher at $12.5 billion, beat analyst expectations of $12.2 billion and on top of that they also reaffirmed 2016 earnings outlook at $10.40 to $10.90 range. The company attributed the strong earnings release to holiday shoppers looking to retailers’ websites to make their purchases which is a strong trend that has been developing over the last few years as shipping becomes more reliable and efficient. MarketWatch
Fred Smith, Chairman of FDX, had this to say during the earnings call,
“FedEx Corporation posted solid earnings and year-over-year EPS improvement of 19%, excluding TNT integration costs and a legal settlement charge for FedEx Ground. We continue to increase margins, earnings per share, cash flows and returns on invested capital. These basic trends should continue well into the future, barring major events or macro-economic factors. A record number of holiday shipments fueled largely by the steady rise of e-commerce are flowing through the FedEx global networks. Monday, we picked up over 26 million packages global. We greatly appreciate the dedication of more than 340,000 FedEx team members who are delivering the holidays to our customers around the world.” SeekingAlpha
FDX is setting up for another strong quarter as we head deeper into the holiday season. I like the upside potential setting up for this popular shipper and will definitely be keeping it on my radar. Currently analysts have an average price target of $181.36.
FDX Technicals
After FDX released earnings, shares took off in the post market session reaching highs of $157.36 and are setting the stage for a nice gap up tomorrow after closing today at $148.83. Shares have been in a bit of a downtrend since June’s high of $185.19 but they look to rebound after the earnings release with a double bottom forming in the $142.50 range. If we can get enough momentum to get back above that 200-day moving average FDX could be in for a great start to 2016.
The daily chart looks super clean with distinct levels to trade off of. Lots of support at $140 and around the 152.50 range with some resistance being met at the 200-day moving average currently sitting at $161.61 as well as the $157.50 and $165 range. As of the close yesterday, FDX was down just over 14% on the year but is looking to recoup some of those loses with a gap up set for tomorrow. Keep an eye on the price action over the next few days as longs will be looking to add and shorts will be looking to cover. The only thing that may have an effect on the price is the Fed raising interest rates, which is going to have an effect on the overall market.
About FedEx Corp,
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 airfreight 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
