Marek Fuchs of TheStreet.com writes about how coverage of FedEx’s earnings missed the main point — that the delivery service company cut its growth estimates.
Fuchs writes, “Zacks only looked backward in their headline, which read: ‘FedEx Beats EPS, Grows Y/Y.’ Nothing on guidance and its wide implications until the bottom.
“Similarly, Reuters and Marketwatch saw FedEx’s earnings through a narrow frame. Reuters ran with: ‘FedEx Q4 adjusted profit higher’ while Marketwatch said: ‘FedEx profit off after aircraft impairment charge.’
“Here’s the real deal: FedEx chopped their global view to 2.6%, from the 2.9% it expected at the beginning of the year. U.S. growth projections for 2012 remained at the lean rate of 2.2%, but it gets worse. Estimates for the full year were cut to ribbons. The midpoint of their new range (which is wide enough to drive one of their delivery trucks thought) is $7.15. Wall Street had been expected $7.39.
“This has all the charm of a tack in the foot.
“FedEx — like United Parcel Service — is seen as a bellwether of the economy, but at this point, should be doing better than the economy with the advent of online shopping offered by everyone from Amazon to Wal-Mart). A package delivery giant should have added advantage. That it apparently does not says a lot of bad — about both FedEx and the economy. As a result, you can’t ignore or even subordinate the forecast.”
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