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FedEx delivers upbeat earnings, shares spike

Friday, March 22, 2024

Today’s headlines

What’s happening: Shares of FedEx Corporation surged in after-hours trading on Thursday, following the release of the company’s fiscal third-quarter results.

What happened: The parcel delivery firm reported better-than-expected earnings for the latest quarter on Thursday.

However, FedEx posted downbeat sales and also narrowed its earnings guidance for fiscal 2024.

How were the results: The Memphis, Tennessee-based company reported a single-digit decline in sales for the quarter ended February 29.

  • Sales declined by 2.1% year-over-year to $21.7 billion, missing the consensus estimates of $22.04 billion.
  • Earnings rose 13.2% to $3.86 per share, which topped Wall Street expectations of $3.45 per share.

Why it matters: FedEx’s Express overnight delivery unit has recently been under pressure due to lower volumes, with the United States Postal Service shifting its packages to more economical services.

Despite the pressure on volumes, the operating margins of Express, the company’s largest division, widened to 2.5% in the quarter, from 1.2% in the year-earlier period.

Revenues from the package delivery business rose slightly to $8.26 billion, while sales from the freight unit fell about 3% to $2.12 billion.

The company’s board announced a new share repurchase program of $5 billion, with around $500 million of share buybacks planned for the current quarter.

“FedEx delivered another quarter of improved profitability in what remains a difficult demand environment, reflecting outstanding service and continued benefits from DRIVE,” CEO Raj Subramaniam said during the earnings call.

Management guided to earnings between $17.25 and $18.25 per share for fiscal 2024, versus their prior forecast of $17 to $18.50 per share.

How shares responded: FedEx’s shares surged 12.9% to $299.07 in the extended trading hours on Thursday, following the release of quarterly results. The stock has gained around 8% over the past month.

What to watch: Investors will continue monitoring the company’s Express unit, as further growth in the division will provide a boost to overall results ahead. Markets will also.

The markets today

The Canadian dollar will be in focus today ahead of a couple of major economic reports

Context: The CAD/USD forex pair weakened on Thursday amid strength in the US dollar.

Details: Investors assessed economic data released on Thursday, which showed new home prices in Canada increasing by 0.1% in February, after a 0.1% decline in the earlier month. On a yearly basis, Canada’s new home prices fell for the eleventh straight month by 0.4% in February, amid higher interest rates.

On Wednesday, the US Federal Reserve held the fed funds rate steady but signalled three interest rate cuts for 2024, which provided a boost to precious and base metal prices.

The US dollar surged on Thursday, exerting pressure on the loonie. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to around 104.

Some weakness in the price of crude oil, one of Canada’s major exports, also weighed on the Canadian currency. WTI crude oil for May delivery fell 20 cents to settle at $81.07 per barrel on Thursday.

The CAD/USD forex pair lost around 0.3% to 1.3533 on Thursday. The S&P/TSX Composite Index gained 0.19% to settle at 22,087.26.

What to watch: Investors await the release of economic data on retail sales and government budget value from Canada today. Analysts expect Canada’s retail sales to decline by 0.4% in January, after a 0.9% increase in December.

Canada’s government budget deficit, which increased to C$4.47 billion in December, is expected to narrow to C$3.9 billion in January.

Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.88%, 0.91%, 0.22% and 0.90%, respectively.

The news shaping the markets

Russia announced its biggest missile attack in weeks on Kyiv in Ukraine on Thursday. The news sent the safe-haven US dollar index higher in forex trading this morning.


UK’s GfK consumer confidence indicator came in unchanged from the prior month at -21 in March, lending support to the GBP/USD forex pair.


Japan’s core consumer price index rose 2.8% year-over-year in February, accelerating from a 2% increase in the previous month. However, the reading came in-line with market expectations, sending the JPY/USD pair higher in forex trading this morning.


New Zealand’s trade deficit narrowed to $0.218 billion in February, from $0.846 billion in the year-ago month. Exports surged by 16% year-over-year to $5.89 billion, which lent support to the NZD/USD forex pair.


Argentina’s retail sales grew 165.3% year-over-year at current prices in January, slowing from a 197% surge in the prior month, which sent the ARS/USD pair slightly lower in forex trading this morning.

What else to watch today

Germany’s import prices, Ifo business climate indicator, Ifo current conditions indicator and Ifo expectations indicator, Turkey’s manufacturing confidence index, capacity utilization and tourist arrivals, UK’s retail sales volumes and CBI industrial trends orders, Russia’s consumer confidence and interest rate decision, Brazil’s FGV-IBRE consumer confidence index, India’s value of loans, deposit growth and foreign exchange reserves, Mexico’s economic activity, consumer prices, US Baker Hughes crude oil rigs and Baker Hughes total rigs, China’s foreign direct investment, as well as Argentina’s leading economic index.


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