Two Ways: Worst Is Over for FedEx?
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The company reported profits for the fourth quarter ending in May of $0.64 per share, $0.13 better than consensus expectations. Revenues fell 20.4% year-over-year, to $7.85 billion; analysts' estimates stood at $8.32 billion.
CEO Fred Smith said that economic conditions were the toughest "in [the] company's history," but there are signs that "the worst of the recession is behind us." It issued downside guidance for the first quarter, saying earnings would likely come in between $0.30 to $0.45 a share; analysts were at about $0.70 per share.
FedEx blamed the cut in profit expectations on the recent increase in fuel prices. It also didn't issue a forecast for the full year, saying economic visibility into the recovery remains unclear. But Smith is still optimistic, due to cost-cutting initiatives that are now gaining traction.
Shares of FedEx fell -1.4%, to $50.70.
From the Bull Pen: FedEx issued downside guidance but its shares were hurt less than 1.5%. If that sounds bullish to you, consider playing this with a sell stop below the day's low ($50).
From the Bear Cave: Bears can look elsewhere. We've mentioned First Solar (FSLR); see the stock follow through after breaking below support and its 50-DMA. Those playing the downside can set a buy stop above the day's high.
Have a good night!
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