Will investors be ready to sign for FedEx’s second quarter earnings release next Tuesday?
It took a while for FedEx to get going this year. For the first few months of 2017 it didn’t really do much, bouncing between $185 and $195. However, from the start of June onwards it has been on a broadly upwards trajectory, eventually – with a few bumps in the road – hitting record peak of $244.08 in mid-December. FedEx Corp (NYSE:FDX) now sits at a current trading price of $238.39.
The firm’s most recent update came in September, and was complicated by June’s NotPetya cyber-attack, which affected its European arm TNT Express. The attack cost FedEx $300 million across Q1 2018, or 79 cents per share, while the impact of Hurricane Harvey lopped off another 2 cents per share. This meant the company reported a rather steep 16% drop in net income to $596 million, with adjusted earnings per share coming in at $2.51, way off the $3.09 expected by analysts; revenue, meanwhile, fell half a billion dollars short of estimates, rising 4% to $15.3 billion.
And this wasn’t even the real bad news. No, the kicker was that FedEx revised its full year forecasts for 2018 lower; it now expects diluted EPS somewhere between $11.05 and $11.85, far off the previously stated range of $12.45 to $13.45.
Yet, as mentioned, FedEx has still managed to climb to all-time highs in the last few weeks, in part thanks to a) the news it had bought 50 new feeder aircraft for its Express division, and b) the progress of the Republican tax reforms.
In terms of Tuesday’s Q2 results, analysts are expecting a 4.8% increase in revenue to $15.6 billion, alongside. Investors would ideally want to hear that full year diluted EPS is going to be at the upper end of September’s revised forecasts, alongside hints of a healthy holiday season.
FedEx Corp has a consensus rating of ‘Buy’ with an average target price of $234.02.
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