FedEx Corporation (NYSE:FDX): The transportation, e-commerce and business services company beat bottom-line EPS estimates before opening bell Wednesday, but fell just short of revenue expectations. Guidance also came in a little bit light. Investors seemed to focus mostly on the EPS beat as FDX opened more than 1% higher and traded much as 4% higher in the morning session, before giving back the majority of the day’s gains in the afternoon.
Actual $2.13 vs. Expected $1.96
Grew 7.04% year-over-year
Actual $11.40B vs. Expected $11.44
Grew 3.56% year-over-year
Revenue increased 4.08% from $10.95 billion in the previous quarter
EPS Q1 2014: Actual $1.59 vs. Expected $1.63
Earnings per share in the current fiscal year: Actual $6.67-$7.04 vs. $7.28
Key Takeaways from Conference Call
CFO Alan Graf: “FedEx Ground posted another strong year and FedEx Freight margins continued to improve, our profit improvement program is progressing, but we continue to see the effects of customers selecting lower-rate international services. FedEx Express will further decrease capacity between Asia and the United States in July.”
Taking a Look at the Chart
Pattern: Uptrend/Wedge Pattern
FedEx stock rallied more than 1% pre-market after the release and accelerated higher during the session, briefly making a new multi-month pivot high at $103.47. However, the stock has pulled well off highs and is back near the opening price.
FDX has been in a long-term uptrend since 2009 and has been in a steeper uptrend since September 2012. After a weak earnings report in March the stock fell sharply but found support at the uptrend line. Even more recently, though, FDX has been in a downtrend since making 52-week highs on May 11, creating a wedge-type pattern. With today’s early strength it looked like FDX might break higher out of the wedge, but the afternoon sell-off caused close back in the pattern.
(click to enlarge)
Potential Sympathy Trades – Stocks in the Same Sector
United Parcel Service, Inc. (NYSE:UPS)