FedEx Corp (NYSE:FDX) Starts The Year On A Strong Note


In the last trading session, the stock price of FedEx Corp (NYSE:FDX) gained more than 1% to close the day at $268.66. The gains came at a share volume of 1.95 million compared to average share volume of 1.46 million. So far in this year, the stock has recorded gains of more than 7%.

The buzz

Last month, FedEx posted earnings of $2.84 per diluted share for the second quarter closed November 30, as against $2.59 per diluted share a year ago. Both as-adjusted and reported fiscal 2018 earnings exhibit the projected negative impact of the June 27 cyberattack impacting TNT Express. The quarterly consolidated earnings for this year as well as last year were adjusted for TNT Express integration expenses.

Frederick W. Smith, the CEO and Chairman of FedEx, reported that strategic execution by the team and a stronger international economy drove better financial results, and they are well set for profitable, long-term growth. They are on track for record holiday-shipping season, while consumer-service levels have been remarkable. They thank their over 400,000 dedicated team members across the globe for their extraordinary commitment.

Operating income surged due to increased volume and higher base rates at each transportation segment, partly offset by lowered revenue leading from the TNT Express cyberattack and increased TNT Express integration expenses. Performance also reflect a tax benefit of around $80 million from foreign tax credits related with a dividend compensated from foreign operations, and a promising net impact from fuel.

FedEx is unable to predict the fiscal 2018 year-end MTM pension accounting adjustments. Hence, the firm is unable to issue FY2018 earnings or effective tax rate projection on a GAAP basis. Before year-close MTM pension accounting adjustments, EPS is now estimated to be $11.45 to $12.05 for FY2018.

The earnings forecast before year-close MTM pension accounting adjustments as well as discounting expenses linked to TNT Express integration and specific first quarter company Trade Networks legal matters is $12.70 to $13.30 a diluted share.

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