What to Expect When FedEx Reports After the Close

FedEx Corp. (NYSE: FDX) is scheduled to release its most recent quarterly results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are $3.09 in earnings per share (EPS) and $15.35 billion in revenue. In the same period of last year, it posted EPS of $2.90 and $14.66 billion in revenue.

The company has announced it will increase its Express and Ground Rates by 4.9% on January 1. FedEx freight rates will go up the same amount on the same date. One Rate prices will move up by an average of 3.5% on that date as well.

The rate increases should help FedEx continue what has been good revenue and earnings momentum. Revenue last year was $60 billion, up from $50 billion a year earlier. The purchase of TNT Express and the revenue it brought accounted for much of the increase. However, FedEx also reported strength on its bottom line. Net income hit $3 billion, up from $1.8 billion on the same basis in the prior year.

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Last month, the delivery giant said that it will not charge most residential holiday season surcharge fees this year. The company will continue to charge fees during the period for oversized packages and those requiring special handling.

While this may not be a big deal to the average consumer who mails a modest number of packages during the holiday period, it is a big deal to e-commerce sellers like Amazon and Walmart. Residential delivery fees also weigh on small e-commerce retailers who work on already-thin margins in order to compete against the big dogs.

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Over the course of 2017, FedEx has outperformed the broad markets, with the stock up 15.5%. Over the past 52 weeks, the stock is up closer to 35%.

A few analysts weighed in on FedEx ahead of the earnings report:

• Credit Suisse has an Outperform rating with a $242 price target.
• Citigroup has a Buy rating with a $235 price target.
• Robert Baird has a Buy rating with a $235 price target.
• Cowen has a Buy rating and a $240 price target.
• BMO Capital Markets has a Buy rating with a $245 price target.
• Stifel has a Neutral rating.
• Loop Capital has a Buy rating and a $234 price target.
• Sanford Bernstein has a Market Perform rating with a $220 price target.

Shares of FedEx were last seen at $215.40, with a consensus analyst price target of $230.10 and a 52-week range of $161.65 to $219.99.

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