FedEx: “A Decisive Beat” Sends Shares Higher

FedEx (FDX) rose 4.7% on Thursday morning after the company beat earnings expectations and sounded generally rosy about the future.

FedEx posted 1.57 of EPS, 4 cents ahead of expectations. Revenue of $10.59 billion was just below expectations for $10.61 billion. A strong online shopping season, and rising ground delivery results helped drive the results.The ground segment saw revenue rise 13% year over year. Operating margin rose to 7.4% from 4.9%.

The company said it now expects to earn between $1.25 and $1.45 per share in the current quarter, against analysts’ expectations for $1.31.

�Our improved performance was largely a result of effective yield management programs and strong demand for FedEx Home Delivery and FedEx SmartPost services,� said Chairman and CEO Frederick W. Smith. �With the healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services.�

Expense management also appears to have played arole, one analyst noted.

“The company’s good bottom line results are partly attributable to its efforts to manage its air capacity to adjust to inventory destocking trends in Asia in 2011,” wrote Dahlman Rose analyst Jason Seidl, who called FedEx’s earnings result “a decisive beat.”

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