FedEx is set to report its fiscal first-quarter earnings after the market closes, and investors are eagerly waiting to see the results. The recent labor negotiations at United Parcel Service (UPS) have heightened their expectations.

According to Wall Street analysts, the consensus estimate for earnings per share is $3.71, with sales projected at $21.7 billion. In comparison, FedEx reported earnings of $3.44 from sales of $23.2 billion a year ago.

Investors are hoping for an earnings beat from FedEx. One influencing factor is the additional volume that FedEx gained from UPS due to businesses’ concerns regarding a potential UPS labor stoppage. Last week, UPS guided its third-quarter earnings per share 25% below consensus, which has further fueled investor expectations.

Raymond James analyst Patrick Tyler Brown highlighted that part of the volume gained from UPS has benefited FedEx. He also noted that FedEx’s stock has received a small boost from the Yellow bankruptcy and the company’s cost-cutting measures.

It is crucial for FedEx to deliver strong numbers in its earnings report to satisfy investor demands and maintain a positive trajectory for its stock.

FedEx Shares Increase After Positive Earnings Report

Shares of FedEx have risen by approximately 8% since the company’s last earnings report. In June, FedEx reported better-than-expected earnings for the fourth quarter of the fiscal year. However, their outlook for the company’s future performance was not as strong as analysts had hoped. Management projected earnings per share of $16.50 to $18.50 for fiscal year 2024, compared to the almost $15 per share earned in fiscal year 2023. While this represents growth compared to 2023, Wall Street had anticipated earnings of around $18.30 per share.

As a result of this weaker outlook, shares dropped 2.5% after the report, closing at $224.73. However, since then, shares have rebounded and closed at just under $250 per share on Tuesday.

For the year so far, FedEx shares have experienced a significant increase of 44%, outperforming both the S&P 500 (up by about 16%) and the Dow Jones Industrial Average (up by approximately 4%).

Although the shift in UPS volume may impact a few quarters at FedEx, investors will be looking for positive volume and pricing trends in the upcoming fiscal first quarter to maintain the upward momentum of the stock.

Management will be hosting a conference call at 5:30 p.m. Eastern time to further discuss the company’s results.

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