Transportation
FedEx Finally Likes Fuel Prices As Economy Weakens (FDX, UPS)
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It looks like lower fuel prices are turning into net gains for transportation companies. Finally! FedEx Corporation (NYSE: FDX) has announced that it now expects to post earnings of $1.23 per share for the first quarter. This is well above previous earnings guidance of $0.80 to $1.00. For fiscal 2009, it has also reaffirmed its earnings guidance of $4.75 to $5.25 per share as weaker economic conditions offset these better-than-expected first quarter results. First Call has estimates at $0.95 for the quarter and $4.98 for the year.
Be advised that this new outlook assumes current fuel prices remain at their current levels.The company has reduced its planned capital investments by $400million, to $2.6 billion for fiscal 2009. Shares traded up 4% to$88.70 in the immediate after-hours trading session. United ParcelService Inc. (NYSE: UPS) also rose $3.2% to $67.18 on the FedEx news.
Jon C. Ogg
September 9, 2008
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