{"id":20664,"date":"2023-09-19T20:38:33","date_gmt":"2023-09-19T20:38:33","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/fedex-earnings-can-upss-labor-trouble-and-yellows-bankruptcy-help-snap-the-streak-of-revenue-misses\/"},"modified":"2023-09-19T20:38:34","modified_gmt":"2023-09-19T20:38:34","slug":"fedex-earnings-can-upss-labor-trouble-and-yellows-bankruptcy-help-snap-the-streak-of-revenue-misses","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=20664","title":{"rendered":"FedEx earnings: Can UPS\u2019s labor trouble and Yellow\u2019s bankruptcy help snap the streak of revenue misses?"},"content":{"rendered":"
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How FedEx Corp. performed in its fiscal first quarter could have a lot to do with some bad things that happened to a couple of the package delivery company\u2019s competitors.<\/p>\n

\u201c[FedEx] was almost certainly a beneficiary of two meaningful events that unfolded within the three months of F1Q24, namely the labor negotiations of its closest peer, which led to market-share shifts right up to the 11th hour, and the bankruptcy\/liquidation of one of the largest competitors to FedEx Freight, which also likely supported both volumes and pricing in that segment,\u201d wrote Evercore ISI analyst Jonathan Chappell in a note to clients.<\/p>\n

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When FedEx
\n FDX,
\n +0.28%<\/bg-quote>
\n reported fiscal fourth-quarter results in June, the company said contract negotiations between its closest peer, United Parcel Service Inc.
\n UPS,
\n -0.27%<\/bg-quote>,<\/span>
\n and the Teamsters union had \u201copened a lot of doors\u201d for it to gain market share.<\/p>\n

And when UPS reported second-quarter results last month, the company said it experienced more volume diversion than expected, as negotiations leading up to a tentative agreement grew \u201clate and loud.\u201d<\/p>\n

Also in August, trucking company Yellow Corp. declared bankruptcy. Citi analyst Christian Wetherbee said last week that FedEx likely benefited in terms of increased volume after Yellow\u2019s closure during the quarter, while BofA Securities analyst Ken Hoexter said Yellow\u2019s exit also likely led to higher pricing and improved margins.<\/p>\n

That doesn\u2019t necessarily mean FedEx will snap its quarterly streak of revenue misses, given what the company has called a \u201cmuted demand environment,\u201d as inflation, rising interest rates and a slowdown in global trade have acted as a headwind for volumes.<\/p>\n

FedEx is slated to report results for the quarter through August on Wednesday, after the closing bell.<\/p>\n

The company has beat the FactSet consensus for earnings per share the past three quarters, but has missed revenue projections for the past five quarters. Among FedEx\u2019s businesses, its Express business has missed revenue expectations the past six quarters, while Ground and Freight have missed the past three quarters.<\/p>\n

\u201cWhile we see Express upside from market-share gains, the combined headwinds from muted China activity, moderating fuel, increased airfreight capacity and soft economic backdrop\u00a0may\u00a0offset the benefits and weigh on volume and pricing outlook,\u201d BofA\u2019s Hoexter wrote in a note to clients.<\/p>\n

But as Evercore\u2019s Chappell said, as important as first-quarter results will be, as the company looks to build a track record of meeting or beating expectations, \u201cthe full-year guide will matter the most.\u201d<\/p>\n

The company\u2019s fiscal 2024 guidance for adjusted earnings per share provided in June was $16.50 to $18.50, which Chappell said was purposely wide given the macroeconomic uncertainty.<\/p>\n

Here is what FedEx is expected to report for its first quarter, according to a FactSet survey of analysts:<\/p>\n