Bellwether FedEx says earnings looking up
FedEx Corp., the world’s second-largest package delivery company, on Friday offered a signal that the global economy is improving, as it raised its first-quarter earnings forecast on better-than-expected international shipments and cost cuts.
The company’s performance is seen as a key indicator of overall economic health, but FedEx hesitated to predict when a recovery may ramp up.
"Despite some encouraging signs in the global economy, it is difficult to predict the timing and pace of any economic recovery," Chief Financial Officer Alan Graf Jr. said in a statement.
The Memphis, Tenn.-based company said it expects earnings of 58 cents per share for the first quarter ended Aug. 31. That’s down 53 percent from a year ago, but well above the company’s previous prediction of 30 cents to 45 cents per share.
On average, analysts were looking for a quarterly profit of 44 cents per share.
FedEx said it raised its forecast because of increased international priority packages and "strict cost management."
The company has cut salaries, laid off workers and made other cuts in the face of slowing demand.
The company’s international priority shipments are delivered between one and three business days.
International package shipments can be an indicator of how well economies are moving because they measure consumer and business activity.
Filed under: economics by Pascal