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Can FedEx (FDX) Spring a Positive Surprise in Q4 Earnings?
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FedEx Corporation (FDX - Free Report) is slated to release fourth-quarter fiscal 2017 results after the closing bell on Jun 20.
FedEx – a leading player in global express delivery services – has delivered a negative surprise of 10.65% last quarter. The company’s earnings per share (on an adjusted basis) of $2.35 were well short of the Zacks Consensus Estimate of $2.63. Also, the bottom line declined year over year due to higher costs. However, quarterly revenues climbed 18.1% year over year and surpassed the Zacks Consensus Estimate.
Despite all the aforementioned pessimism, the FedEx stock has been performing well of late. Shares of FedEx have outperformed the Zacks categorized Transportation - Air Freight industry in the last one month. The stock has gained 12.28%, while the industry improved 8.83%, over the same period.
An earnings beat might not be too difficult for FedEx in the quarter, as according to our proven model, the company has the perfect combination of two key ingredients.
Zacks ESP: The Earnings ESP for FedEx is +0.77% as the Most Accurate estimate is pegged at $3.92, while the Zacks Consensus Estimate stands at $3.89. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FedEx carries a Zacks Rank #3 (Hold). Please note that the stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Factors at Play
After two successive earnings misses, the company now expects to perform strongly in the fiscal fourth quarter. It expects a margin of over 15% at its Ground unit in the fourth quarter of the fiscal, thereby driving the strong results, predicted for the final quarter of fiscal 2017.
The strong growth of e-commerce is also expected to aid results in the quarter. Moreover, FedEx’s expanded product portfolio following the acquisition of TNT Express should aid results. During the quarter, FedEx launched flights connecting TNT’s European air hub in Liège (Belgium) to the FedEx World Hub in Memphis (U.S.). Following this move, the TNT customers now have a direct access to the strong portfolio of FedEx services in both the U.S. and Canada. The company’s efforts to reward shareholders through dividend payments and share buybacks are also worth appreciating.
However, headwinds like high costs might hurt the bottom line in the fiscal fourth quarter. We expect the company to provide a detailed guidance for fiscal 2018 in the conference call.
Other Stocks to Consider
Investors interested in the broader transportation sector may also consider American Airlines Group, Inc. (AAL - Free Report) , Alaska Air Group, Inc. (ALK - Free Report) and Canadian National Railway Company (CNI - Free Report) , since our model shows that all these stocks possess the right combination of elements to post an earnings beat in their next releases.
American Airlines has an Earnings ESP of +5.92% and a Zacks Rank #3. Alaska Air Group has an Earnings ESP of +3.32% and a Zacks Rank #3.
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Can FedEx (FDX) Spring a Positive Surprise in Q4 Earnings?
FedEx Corporation (FDX - Free Report) is slated to release fourth-quarter fiscal 2017 results after the closing bell on Jun 20.
FedEx – a leading player in global express delivery services – has delivered a negative surprise of 10.65% last quarter. The company’s earnings per share (on an adjusted basis) of $2.35 were well short of the Zacks Consensus Estimate of $2.63. Also, the bottom line declined year over year due to higher costs. However, quarterly revenues climbed 18.1% year over year and surpassed the Zacks Consensus Estimate.
Despite all the aforementioned pessimism, the FedEx stock has been performing well of late. Shares of FedEx have outperformed the Zacks categorized Transportation - Air Freight industry in the last one month. The stock has gained 12.28%, while the industry improved 8.83%, over the same period.
An earnings beat might not be too difficult for FedEx in the quarter, as according to our proven model, the company has the perfect combination of two key ingredients.
Zacks ESP: The Earnings ESP for FedEx is +0.77% as the Most Accurate estimate is pegged at $3.92, while the Zacks Consensus Estimate stands at $3.89. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: FedEx carries a Zacks Rank #3 (Hold). Please note that the stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.
Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Factors at Play
After two successive earnings misses, the company now expects to perform strongly in the fiscal fourth quarter. It expects a margin of over 15% at its Ground unit in the fourth quarter of the fiscal, thereby driving the strong results, predicted for the final quarter of fiscal 2017.
The strong growth of e-commerce is also expected to aid results in the quarter. Moreover, FedEx’s expanded product portfolio following the acquisition of TNT Express should aid results. During the quarter, FedEx launched flights connecting TNT’s European air hub in Liège (Belgium) to the FedEx World Hub in Memphis (U.S.). Following this move, the TNT customers now have a direct access to the strong portfolio of FedEx services in both the U.S. and Canada. The company’s efforts to reward shareholders through dividend payments and share buybacks are also worth appreciating.
However, headwinds like high costs might hurt the bottom line in the fiscal fourth quarter. We expect the company to provide a detailed guidance for fiscal 2018 in the conference call.
Other Stocks to Consider
Investors interested in the broader transportation sector may also consider American Airlines Group, Inc. (AAL - Free Report) , Alaska Air Group, Inc. (ALK - Free Report) and Canadian National Railway Company (CNI - Free Report) , since our model shows that all these stocks possess the right combination of elements to post an earnings beat in their next releases.
American Airlines has an Earnings ESP of +5.92% and a Zacks Rank #3. Alaska Air Group has an Earnings ESP of +3.32% and a Zacks Rank #3.
Canadian National Railway has an Earnings ESP of +6.38% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>