FedEx (NYSE: FDX) EPS Report Shows us a Hiding Place for Corporate American Ailments

We're On Guard for You Against Shady Tactics

FedEx (NYSE: FDX) shares rose 3% Thursday after it painted a rosy view of the economy and its own forward quarter outlook. The transportation company is an important barometer of the broader economy, and so its report and communications are important to all investors. But I'm warning readers to beware the current environment, because I see within it a place for corporate America to hide what ails it.

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FedEx (NYSE: FDX) EPS Report Shows us a Hiding Place for Corporate American Ailments

FedEx shares rose despite the company's missing its fiscal third quarter target by a penny, after already having warned analysts that severe weather would impact its quarter. The final tally from the snowy December/January span cost the company approximately $0.12 in EPS. The company earned $0.81, excluding nonrecurring items, just shy of the adjusted $0.82 analyst consensus tallied by Bloomberg.

Besides that bad news, an analyst from Barclay's Capital (NYSE: BCS) estimates the company does $1.7 billion in annual business from Japan, some 4% of its total revenue. If that was not enough, gasoline and other fuel costs that strike at the core of FedEx's expenses, are on the rise without ceiling in sight.

Yet, FedEx overcame a potentially terrible Thursday by focusing the market's attention on the opportunity it has to ship relief and reconstruction supplies into Japan. Better yet, it projected EPS of $1.66 to $1.83 for its May quarter that left the analysts' consensus short at approximately $1.66 per share. That's the kind of good news the market rewards, and it did.

After its rosy forecast that supposedly takes into account the "current market outlook for fuel prices and continued moderate growth in the global economy," the market ignored FedEx's subtle warning that its earnings "could be affected by the effects of ongoing political turmoil in the Middle East and North Africa on fuel prices and the economy." After making the big prediction for its numbers, the company went on to warn that the uncertain situation in Japan could somehow affect its operating environment. Well duh!

I'm not saying FedEx is doing this, but it seems there is a cushion for companies now, and perhaps some are taking advantage of an opportunity to forecast liberally to overcome current bad news. After all, that gives a company a full three months to make the magic happen, or else just blame the next miss on the "extraordinary" chaos overseas. I'm just saying the volatile global environment allows some leeway for little white lies, not that anyone in corporate America would ever do something like that...



Article interests: FedEx (NYSE: FDX), United Parcels Service (NYSE: UPS), C.H. Robinson Worldwide (Nasdaq: CHRW), Expeditors International (Nasdaq: EXPD), UTI Worldwide (Nasdaq: UTIW), Hub Group (Nasdaq: HUBG), Forward Air (Nasdaq: FWRD), Air Transport Services (Nasdaq: ATSG), Pacer International (Nasdaq: PACR), Air T Inc. (Nasdaq: AIRT), Sino-Global Shipping America (Nasdaq: SINO), WLG Inc. (Nasdaq: WLGI), Union Pacific (NYSE: UNP), Canadian National Railway (NYSE: CNI), CSX (NYSE: CSX), Norfolk Southern (NYSE: NSC), Canadian Pacific Railway (NYSE: CP), Kansas City Southern (NYSE: KSU), Westinghouse Air Brake (NYSE: WAB), Guangshen Railway (NYSE: GSH), Trinity Industries (NYSE: TRN), Genesee & Wyoming (NYSE: GWR), RailAmerica (NYSE: RA), Greenbrier (NYSE: GBX), American Railcar (Nasdaq: ARII), FreightCar America (Nasdaq: RAIL), Providence & Worcester (Nasdaq: PWX), J.B. Hunt Transport (Nasdaq: JBHT), Landstar System (Nasdaq: LSTR), Con-way (NYSE: CNW), Werner Enterprises (Nasdaq: WERN), Old Dominion Freight (Nasdaq: ODFL), Knight Transportation (NYSE: KNX), Heartland Express (Nasdaq: HTLD), Marten Transport (Nasdaq: MRTN), Celadon Group (NYSE: CGI), Echo Global Logistics (Nasdaq: ECHO), Universal Truckload (Nasdaq: UACL), Patriot Transportation (Nasdaq: PATR), Saia (Nasdaq: SAIA), Quality Distribution (Nasdaq: QLTY), USA Truck (Nasdaq: USAK), Covenant Transportation (Nasdaq: CVTI), P.A.M. Transportation (Nasdaq: PTSI), YRC Worldwide (Nasdaq: YRCW), Express-1 Expedited Services (AMEX: XPO), Frozen Food Express (Nasdaq: FFEX), Tidewater (NYSE: TDW), Kirby (NYSE: KEX), Teekay (NYSE: TK), Teekay LNG Partners (NYSE: TGP), Frontline (NYSE: FRO), Seacor (NYSE: CKH), Alexander & Baldwin (Nasdaq: ALEX), Ship Finance International (NYSE: SFL), DryShips (Nasdaq: DRYS), Teekay Offshore Partners (NYSE: TOO), Golar LNG (Nasdaq: GLNG), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), Diana Shipping (NYSE: DSX), Navios Maritime Partners (NYSE: NMM), Overseas Shipholding (NYSE: OSG), Costamare (Nasdaq: CMRE), Hornbeck Offshore (NYSE: HOS), Safe Bulkers (NYSE: SB), Knightsbridge Tankers (OTC: VLCCF), Navios Maritime (NYSE: NM), Danaos (NYSE: DAC), Teekay Tankers (NYSE: TNK), Genco Shipping (NYSE: GNK), Excel Maritime (NYSE: EXM), Global Ship Lease (NYSE: GSL), Tsakos Energy Navigation (NYSE: TNP), Capital Product Partners (Nasdaq: CPLP), Eagle Bulk Shipping (Nasdaq: EGLE), General Maritime (NYSE: GMR), DHT Holdings (NYSE: DHT), Baltic Trading (Nasdaq: BALT), Scorpio Tankers (Nasdaq: STNG), Paragon Shipping (Nasdaq: PRGN), Star Bulk Carriers (Nasdaq: SBLK), Ultrapetrol (Nasdaq: ULTR), StealthGas (Nasdaq: GASS), International Shipholding (NYSE: ISH), K-Sea Transportation (Nasdaq: KSP), Euroseas (Nasdaq: ESEA), Horizon Lines (NYSE: HRZ), TBS International (Nasdaq: TBSI), Rand Logistics (Nasdaq: RLOG), Diana Containerships (Nasdaq: DCIX), Globus Maritime (Nasdaq: GLBS), OceanFreight (Nasdaq: OCNF), Grupo TMM (NYSE: TMM), Trailer Bridge (Nasdaq: TRBR), Top Ships (Nasdaq: TOPS), B&H Ocean (AMEX: BHO), FreeSeas (Nasdaq: FREE), Omega Navigation (Nasdaq: ONAV), NewLead (Nasdaq: NEWL).

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