FedEx Corporation (NYSE: FDX)
FedEx Corporation is having an incredible time in after-hours trading today, and for good reason. The company reported earnings for the first fiscal quarter, beating expectations in all respects. Today, we’ll talk about what we saw from earnings, how the stock reacted to the news, and what we can expect to see from FDX ahead.
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FDX Reports Solid Q1 Earnings
As mentioned above, FedEx Corporation is having a great time in after-hours trading following a strong earnings release. Here’s what we saw from the report:
- Earnings Per Share – In terms of earnings per share, FDX did overwhelmingly well. Analysts expected that the company would generate earnings in the amount of $2.81 per share during the first quarter. However, the company actually generated earnings in the amount of $2.90 per share. Not only did the figure come in well ahead of analyst expectations, it blew away the $2.42 seen in the same quarter one year ago.
- Revenue – As if strong earnings wasn’t enough to excite investors, FDX did incredibly well with regard to revenue as well. In terms of revenue, analysts expected that the company would generate $14.61 billion during the quarter. However, the company actually reported revenue in the amount of $14.66 billion. Once again, this showed an incredible improvement year-over-year. In the same quarter last year, the company generated revenue in the amount of $12.3 billion.
What We’re Seeing From The Stock As A Result
As investors, one of the first things that we learn is that the news moves the market. When positive news is released, stocks tend to see gains. Adversely, negative news will generally lead to declines. In this case, the news was overwhelmingly positive. After all, investors invest for growth, and, with strong earnings, FedEx has delivered the growth they are looking for. As a result, we’re seeing gains on the stock in after hours trading. Currently (6:22), the stock is trading at $167.40 per share after an after-hours gain of $4.85 per share (2.92%) thus far today.
What We Can Expect To See Moving Forward
While the earnings report was overwhelmingly positive, I have to say that, when it comes to FDX, I have a relatively mixed opinion of what we can expect to see. At the end of the day, as a global shipments company, the company is heavily exposed to economic conditions. At the moment, it seems as though economic conditions are starting to improve. If this trend continues, FedEX will likely continue seeing gains in the market.
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However, it’s important to consider the risks. At the moment, the global economy is unstable at best. Any shift in economic activity could cause declines in the number of shipments as consumers spend less money. At the end of the day, this could affect the stock in a negative way. So, while I remain relatively optimistic with regard to what we can expect to see from FDX, that optimism is definitely met with caution.
[Image Courtesy of Wikimedia]