Holiday Update, TNT Express Impact in Focus When FedEx Reports -- Earnings Preview
March 20 2017 - 2:57PM
Dow Jones News
By Paul Ziobro
FedEx Corp. is scheduled to announce its fiscal third-quarter
earnings after the market close Tuesday. Here's what you need to
know:
EARNINGS FORECAST: Analysts polled by Thomson Reuters expected
FedEx to earn $2.62 per share, compared with $2.51 in the
year-earlier quarter. FedEx said in December that it expected
adjusted fiscal 2017 earnings of $11.85 to $12.35.
REVENUE FORECAST: Revenue of $14.99 billion is forecast by
analysts, compared with $12.7 billion a year earlier.
WHAT TO WATCH:
-- HOLIDAY WRAP: FedEx will provide the final results for the
holiday season. Due to its reporting schedule, FedEx splits the
performance for the key period between its second and third
quarters. FedEx expected to handle 10% more packages between
Thanksgiving and December, as the surge in online shopping means
more business. While the added volume boosts revenue, FedEx and
rival United Parcel Services Inc. are both spending heavily to keep
up with that business, hurting margins.
-- PRICING: Like UPS, FedEx has raised prices to cope with the
higher demand, and investors will examine the carrier's results to
see how successful it was at getting big customers to agree to
them. FedEx has been willing to turn away business from some large
e-commerce shippers because they didn't accept the higher
rates.
-- TNT UPDATE: Investors anticipate an update on FedEx's recent
acquisition of TNT Express. FedEx has been integrating the
operations of the Dutch parcel-delivery company since buying it
last May for $4.8 billion. The process appears to have gone more
quickly than expected, as FedEx promoted Dave Bronczek, the point
man on the integration, to president and operating chief 11 months
earlier than expected. Citi analysts see this as a positive sign
that FedEx will be able to squeeze $750 million in annual cost
savings from buying TNT by 2020.
-- AMAZON BUSINESS: Some analysts wonder whether FedEx could be
in line to pick up some of the millions of packages shipped by the
online retailing giant Amazon.com Inc. FedEx has long helped the
U.S. Postal Service ship packages during the day, when most planes
are grounded at airports waiting to make overnight deliveries. Citi
analysts think that FedEx might be able to provide similar service
for Amazon, although this comes as Amazon is making moves to build
out its own delivery network.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
March 20, 2017 14:42 ET (18:42 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Sep 2023 to Sep 2024