FedEx Ready To Deliver Earnings (FDX, UPS)

March 19, 2008 by Douglas A. McIntyre

Thursday we’ll see earnings out of FedEx Corporation (NYSE: FDX). The estimates from First Call are $1.22 EPS on $9.11 billion in revenues.  Next quarter estimates are $1.95 EPS on $9.45 billion in revenues. Estimates for fiscal May-2008 are $6.31 EPS on $37.48 billion in revenues. Estimates for fiscal May-2009 are $7.11 EPS on $39.98 billion in revenues.

If you want to use options that also expire tomorrow, it appears that options traders are braced for a move of up to about $2.10 in either direction.  Analysts have an average price target north of $112.00, some 30% higher than today’s close of $86.23.  FedEx’s 52-week trading range is $80.00 to $119.10.

UPS (NYSE: UPS) recently telegraphed that February volumes were down.  Over the last 3-months FedEx shares are down about 10% while UPS shares are marginally down; over the last year, UPS shares are up marginally, while FedEx shares are down roughly 20%.  UPS has outperformed the stock and may be a current favorite in comparison as a result, but FedEx looks like it has more caution priced in

The biggest outlying factor we are looking for doesn’t really revolve around this last quarter earnings.  It revolves around $100 oil combined with a slowing consumer, which combined could keep the de-pressurization a real risk.

Jon C. Ogg
March 19, 2008