The company lowered the forecast for its 2016 full-year EPS from a prior range of $10.60 to $11.10 to a new range of $10.40 to $10.90 and affirmed the capital spending budget of $4.6 billion. The consensus estimates call for EPS of $10.82 and revenues of $50.31 billion. The outlook assumes moderate economic growth and does not include any operating results or costs related to TNT Express.
The company’s chief financial officer said:
Our new fiscal 2016 outlook is modestly lower than our initial forecast due primarily to weaker LTL industry demand and higher than expected self-insurance reserves and operating costs at FedEx Ground. We still expect strong earnings growth this year, as we remain focused on executing our profit improvement program, leveraging e-commerce growth and enhancing our revenue quality.
FedEx repurchased 1.1 million shares of stock during the quarter.
The company announced on Tuesday that shipping rates for FedEx Express, FedEx Ground and FedEx Freight will increase by an average of 4.9% effective January 4, 2016. FedEx is also increasing surcharges for FedEx Ground shipments that exceed the published maximum weight or dimensional limits, and updating certain fuel surcharge tables at FedEx Express and FedEx Ground effective November 2, 2015.
Higher freight rates will not appease investors who will have noticed that Chairman and CEO Fred Smith said that FedEx performed “solidly given weaker-than-expected economic conditions, especially in manufacturing and global trade.” That does not translate into good news for the company.
Shares of FedEx traded down about 3% in premarket trading Wednesday, at $149.34 in a 52-week range of $130.13 to $185.19. The consensus price target from Thomson Reuters was $192.88 before the results were announced.
ALSO READ: 8 Buybacks and Dividends Just Too Big to Ignore
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.