FedEx Corporation (NYSE:FDX) plans to release its financial results for the third quarter of fiscal year 2014 on Wednesday, March 19, 2014 before the market opens The Company plans to host a webcast at 8:30 a.m. ET the same day to review the results and management's outlook.
Wall Street anticipates that the delivery company will earn $1.51 per share for the quarter, which is $0.28 more than last year's profit of $1.23 per share. iStock expects FDX to miss Wall Street's consensus number. The iEstimate is $1.47, a bearish surprise of $0.04; although, we could be lowballing the Dow Transportation Index member's actual results.
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Along with EPS rising an expected 22.76%, sales are forecasted to increase 4.6%. The consensus revenue estimate for Q3 is $11.46 billion, up from last year's $10.95 billion.
FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services.
Bullish or bearish surprises have been a flip of the coin for the Dow Jones member. In the last 13 quarters, FedEx delivered seven bullish and six bearish surprises. When topping the street's view, the average beat was 5.37% more than estimates. Meanwhile, the bottom line fell short by an average of -5.08% when profits didn't live up to hopes.
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EPS-driven price sensitivity favored bulls with eight green and five red responses. The eight price hikes averaged 3.72% with a range of 0.43% to 9.83%. The handful of red reactions spread from -2.67% to -9.36% with a typical loss of -5.34%.
According to Google Trends, search volume intensity (SVI) for the keyword "FedEx" is flat year-over-year (YoY), which could mean revenue might come in light. However, e-commerce sales for the holiday shopping season could make up any shortfall. According to emarketer.com, "e-commerce holiday sales saw an even sharper growth rate of 9.3%, with sales totaling $95.7 billion."
The story added, "E-commerce analytics company Custora also reported significant e-commerce growth over the 2013 holiday shopping season. Revenues over the two-month period from the beginning of November to the end of December climbed 12% year over year, according to the company. Black Friday and Cyber Monday both also saw impressive increases in revenues, climbing 16% and 18%, respectively. In addition, the number of total orders increased during all three of these time periods compared with the previous year."
Change the keyword to "FedEx Tracking." Which we think is a better proxy for expected deliveries; YoY SVI increased 10.6%, which hints at a potential revenue surprise, especially when you consider the strength of e-commerce.
Now, if sales to top expectations, then we'd expect to see extra EPS on the bottom line based on our review of FDX's most recent 10-Q. Revenue and cost increased at essentially the same rates, so margins should hold quarter-to-quarter.
Overall: Although the iEstimate suggests a bearish surprise for FedEx Corporation (NYSE:FDX), Google Tends and e-commerce holiday strength could translates into sales that exceed the consensus, which could make the iEstimate too conservative.
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