Shares of FedEx are set to open St. Patty’s day a bright hue of green after reporting strong earnings.
(RTTNews.com) – Package delivery giant FedEx Corp. (FDX), Wednesday reported a third-quarter profit that beat Street estimates, driven largely by strong revenue growth at FedEx Ground segment. The company lifted its full year outlook, sending its stock up by 5 percent in after-hours trading.
Memphis, Tennessee-based FedEx’s third-quarter profit dropped to $507 million or $1.84 per share from $628 million or $2.18 per share last year.
Adjusted earnings for the quarter rose to $2.51 per share from $2.03 per share last year. On average, 23 analysts polled by Thomson Reuters expected earnings of $2.34 per share for the quarter. Analysts’ estimates typically exclude special items.
Revenues for the quarter increased to $12.7 billion from $11.7 billion last year. Wall Street analysts had a consensus estimate of $12.4 billion.
Revenues for FedEx Express declined 1 percent to $6.56 billion, while FedEx ground revenues increased 30 percent to $4.41 billion from last year. Revenues for FedEx freight rose 1 percent to $1.45 billion.
Looking forward to full year 2016, FedEx tightened its adjusted earnings forecast to $10.70 to $10.90 per share from prior outlook of $10.40 to $10.90 per share. Analysts currently estimate earnings of $10.56 per share for 2016.
Being a global transportation companies, the performance of shipping giants like FedEx and its rival United Parcel Service Inc. (UPS) are considered a strong barometer of overall consumer attitude and economy.
FedEx is one of the many carriers servicing the last great retailer, Amazon. Thus they serve as a proxy for the health of the consumer space. By the looks of it, retail is booming.
If you think of the economy as a human body, delivery and transportation are the blood in the system. The stronger the vascular flow, the more powerful the economy.
FedEx having a strong quarter makes it tough to be bearish on the retail space, especially companies investing into their online experience.
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