Sometimes, what a company reports about its quarter means everything for the performance of the stock. In other cases, Wall Street decides to use a quarterly report as a launching pad for a broader verdict on an entire sector or theme. That would seem to be the case at FedEx (NYSE:FDX); while the quarter arguably was not as strong as the headline numbers suggest, the market reaction would seem to be a broader vote on the near-term outlook for the global economy.
Fiscal Q1 - Not as Good as it Seems?
On the surface, it looks like FedEx did what it had to do this quarter. Revenue rose more than 11% and surpassed the average estimate, and the company showed fairly solid operating leverage. Still, there were some "yeah, buts" this quarter.
Within the top line number, express revenue rose more than 11%, but volume was barely positive. Domestic package volume was actually down and international priority volume was surprisingly weak (down about 4%). Ground revenue looked solid (up 16%) and volume was decent, but freight revenue was up only about 6% despite a nearly 13% increase in yields (that is, pricing).
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