Shares of FedEx (FDX) were�falling, despite the shipper’s bottom-line beat, as China worries and light first quarter guidance weighed on the stock.
This morning FedEx said it earned $521 million, or $1.65 a share in its fiscal third quarter, up from 73 cents a year ago. Excluding one-time items, EPS�rose to $1.55 from 81 cents, ahead of the company’s forecast in December. Revenue rose 9% to $10.56 billion, just shy of the $10.6 billion estimate held by analysts polled by Thomson Reuters.
Operating margin widened to 7.7% from 4.1%.
For the current fiscal fourth quarter, FedEx says it now expects to earn between $1.75 and $2 a share, the midpoint of which is below the $1.98 a share analysts’ expected.��However, the company’s full-year guidance of��$6.35 to $6.60�came in ahead of the consensus $6.36.
Standard & Poor’s Capital IQ analyst J. Corridore reiterated his Strong�Buy rating and $128 price target on the stock following the news. “FDX did a good job offsetting volume declines with higher yields as it worked to manage yields upward through pricing, fuel surcharges and package mode changes.”
However, with Asian demand such a large concern for major global shippers like FedEx, the shares were weighed down by the disappointing manufacturing index out of China today. Still, many analysts remain optimistic about the company’s long-term prospects. In a recent note, Edward Jones analyst Matt Collins reiterated his Buy rating: “Current economic concerns have caused the stock price to pull back. When the global economy recovers, we expect rising earnings momentum. With solid long-term growth opportunities and steadily improving internal efficiency, we consider this valuation to be attractive for long-term investors.”
Update: The Department of Labor also�said it had reached a settlement today�with two of the company’s units over claims of hiring discrimination, ending a seven-year investigation.��To settle the charges, FedEx agreed to pay $3 million in back pay and interest to 21,635 applicants who were rejected for entry-level jobs at 22 FedEx Ground facilities and one FedEx SmartPost location. As part of the agreement, the company is admitting no wrongdoing in its hiring practices.
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