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Reality Bites: Fedex Cuts Outlook On Global Growth Concerns

Tyler Durden's picture




 

...and so it begins - with a bellwether:

  • *FEDEX CUTS 1Q EPS FORECAST TO $1.37-$1.43, EST. $1.56

"Weakness in the global economy constrained revenue growth at FedEx Express more than expected in the earlier guidance."

FDX -4% AH and UPS -2.5% - both to lows of year!

 

This is not a good sign for GDP! (h/t @Not_Jim_Cramer)

 

FedEx Corp. (FDX) today announced that earnings for the first quarter ended August 31, 2012 are expected to be in the range of $1.37 to $1.43 per diluted share, compared to $1.46 per diluted share last year. The company’s original first quarter forecast was for earnings of $1.45 to $1.60 per diluted share.

 

Earnings during the quarter were lower than originally forecast, as weakness in the global economy constrained revenue growth at FedEx Express more than expected in the earlier guidance.

 

The company has not yet closed the books for the quarter. Additional information will be available on September 18, 2012, when the company releases a full earnings report at 6:30 a.m. CDT and conducts its quarterly earnings conference call at 7:30 a.m. CDT.

 

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Tue, 09/04/2012 - 17:29 | 2761950 redpill
redpill's picture

Just taking "Fed" out of their name would probably be good for a few bucks in stock price.

Tue, 09/04/2012 - 17:37 | 2761987 fireangelmaverick
fireangelmaverick's picture

Actually if they made it Fed-Res-Express, their stock would probably triple.

 

Tue, 09/04/2012 - 17:46 | 2762016 King_of_simpletons
King_of_simpletons's picture

This is actually good news. Will move Dow up 100 to 150 points. FedEx and UPS are not bankrupt yet. Even if they are bankrupt it is great news. Their name sounds good for another 200 or 300 point move up. Just great news overall. Simply move up up and up.

Tue, 09/04/2012 - 18:16 | 2762125 bdc63
bdc63's picture

Correlation is a bitch

It's a FED, FED, FED EX world ...

Tue, 09/04/2012 - 19:12 | 2762397 TruthInSunshine
TruthInSunshine's picture

I don't put faith in any "indicator" or "indicators" as I know that all datum is so heavily scrubbed and laundered (especially that put out by publicly traded companies) as to be of little predictive value in terms of timing based on fundamentals.

Having said that, if one wants as close to as pure a peek into accurate, real time data regarding the true state of the economy, the volume of garbage that's discarded is probably among the most pure and useful.

Garbage volume is a number that doesn't really have anyone manipulating it nor scrutinizing it, yet it reveals a lot about real time levels of consumption.

Tue, 09/04/2012 - 19:19 | 2762425 SeattleBruce
SeattleBruce's picture

That's interesting - do you have a good link for that stat?

Tue, 09/04/2012 - 20:33 | 2762735 pavman
pavman's picture

I would think garbage up, economy up.  Garbage down, economy down.  Duh.  I mean, bad economy = make shit last longer.  Good economy...who gives a shit, I just made $8M betting on QE^n!!!!  We're gonna throw out trash like its 1999!

Bitchez.

Tue, 09/04/2012 - 18:09 | 2762101 vast-dom
vast-dom's picture

looking at the chart reality has not yet bitten....fucking QE can only lift indices, but never fundamentals outside of financials...unless Bernankzi starts injecting directly into any corporations that may impact said index.

 

insanity bites.

 

the 90s sure weren't correlating in that chart...

Tue, 09/04/2012 - 20:35 | 2762741 pavman
pavman's picture

The 90s were SOOOO last millenia.  Like OMG that was back when the Post Office wasn't bankrupt.

Tue, 09/04/2012 - 17:51 | 2762046 slaughterer
slaughterer's picture

Peope are just driving their packages to the recipient rather than paying FedEx to do it.  Plus there is a lot less "stuff" to send anyhow.  

Tue, 09/04/2012 - 17:29 | 2761952 vote_libertaria...
vote_libertarian_party's picture

worser = gooder....BUY BUY BUY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Tue, 09/04/2012 - 17:42 | 2762009 Rainman
Rainman's picture

Magic 8-ball say Blowout Xmas coming...BTFD !!!!!!!!!!!!!!

Tue, 09/04/2012 - 17:30 | 2761962 Conman
Conman's picture

Waht happened did UPS get the Benny-buck shipment contract over them? QE not gonna bring back shipments?! The hell you say.

Tue, 09/04/2012 - 17:32 | 2761964 Jlmadyson
Jlmadyson's picture

Save maybe garbage and iron there is no other better indicator in the economy than Fed Ex.

But fear not Draghi and Benny Boy Bernake will save us all. Timmy G will be doing his best to save us from the debt ceiling as well.

And GDP will be a 4.0 print and CPI 0%.

Warm and fuzzy all over.

Tue, 09/04/2012 - 18:07 | 2762098 pursueliberty
pursueliberty's picture

Transports period.

No need to move the unneeded.

 

The qe money doesn't make businesses further increase currently bloated inventory or cause people to buy/ship bloated inventory.  I'm not buying shit that isn't 65% off unless it shoots or is edible.

Tue, 09/04/2012 - 18:42 | 2762253 slaughterer
slaughterer's picture

DOW THEORY is now completely vaporized.  

Tue, 09/04/2012 - 21:20 | 2762882 pavman
pavman's picture

 I'm not buying shit that isn't 65% off unless it shoots or is edible.

I think you forgot shiny.

Tue, 09/04/2012 - 17:31 | 2761965 Randall Cabot
Randall Cabot's picture

Look how much money they will save on gasoline-BULLISH!!!

Tue, 09/04/2012 - 17:31 | 2761966 mjorden
mjorden's picture

"Relax, it’s FedEx.

Tue, 09/04/2012 - 17:35 | 2761977 Bunga Bunga
Bunga Bunga's picture

Car Sales August:

Germany -4.7% (YoY)

Portugal -33.1% (YoY)

Italy -20.2% (YoY)

France -11.4% (YoY)

 

 

Tue, 09/04/2012 - 17:37 | 2761986 buzzsaw99
buzzsaw99's picture

trannies take in it the dumper

Tue, 09/04/2012 - 17:39 | 2761993 Jlmadyson
Jlmadyson's picture

Obama really needs to fine tune this labor print this Friday like never before. Low enough to warm the printing presses but not too low that granny would jump ship.

Tue, 09/04/2012 - 17:43 | 2762008 Jason T
Jason T's picture

tide is going up and the wave that just washed ashore is going back out... fast.  

Tue, 09/04/2012 - 17:45 | 2762012 Squid Vicious
Squid Vicious's picture

should be good for at least a 5 handle green open in the a.m. as QE3 goes from 120% to 130% priced in...

Tue, 09/04/2012 - 17:46 | 2762022 Temporalist
Temporalist's picture

These are not the green shoots you are looking for.

or

The summer of recovery has just begun.

Tue, 09/04/2012 - 17:46 | 2762023 cougar_w
cougar_w's picture

On-line orders killed the downtown small business just in time to implode and take the entire retail sector out with them!

How charmingly efficient.

Tue, 09/04/2012 - 18:05 | 2762094 Conman
Conman's picture

Must be bullish for Amazon right? becuase with razor thin margins and an insane PE , it must be good that shipments are down right?! Because QE will fix that.

Tue, 09/04/2012 - 18:22 | 2762155 SAT 800
SAT 800's picture

Reality is a Bitch, ain't it?

Tue, 09/04/2012 - 18:38 | 2762232 Rainman
Rainman's picture

Let's look at the bright side. Those malls are going to convert easily to oustanding enclosed prison camps. Think taxpayer savings.

Tue, 09/04/2012 - 17:50 | 2762033 Meesohaawnee
Meesohaawnee's picture

but but but CNBC just said everyone is buyin equities.. this cant be. they dont lie do they?

Tue, 09/04/2012 - 17:54 | 2762053 Catullus
Catullus's picture

Exelon, power generator for a large portion of the northeast US making 8-year lows today too.

Tue, 09/04/2012 - 18:00 | 2762080 q99x2
q99x2's picture

GDP seems to follow FedEx EPS but hasn't done so yet. Gross says QE in a week or so. That should make everything better. I"m thinking the same since GS's recent call to sell equities around the 14th.

Tue, 09/04/2012 - 18:12 | 2762119 TrustWho
TrustWho's picture

OMG....Daddy, Daddy help me. Here I am, don't worry little ones. I needed to feel some appreciation for all my good deeds. I will answer your prays. I have actully created a super duper printer and a tertiary process with my super clever off-balance sheet way of distributing this money to my friends. All zero hedge idiots will never be able to prove I was actually printing new money. They may create their conspiracy stories when inflation hits 25%, but Obama will just lock them in the psycho ward.  Obama will get elected and I get to keep my gig for another 4 years. I can't wait to see how much money I can print in the next 4 years to SAVE THE WORLD from great Depression II. By the time I am done, firewood will be worth more money than my new trillion dollar note. Oh by the way, Obama promised me I could have my picture on the Trillion dollar bill. Little ole me from SC, my Mom and Dad could never imagined!

Tue, 09/04/2012 - 18:13 | 2762121 Global Hunter
Global Hunter's picture

Using shipping as any kind of indicator in regards to economic outlook is old fashioned and out of date.  The best metric to use is downloads, clicks or "friends".

Tue, 09/04/2012 - 18:24 | 2762162 Schmuck Raker
Schmuck Raker's picture

That's right. Same with personal finance, I don't even check the balances in my accounts anymore - as long as my wallet's full of credit cards(and they haven't expired - that's key) I know i can shop with CONfidence.

Tue, 09/04/2012 - 18:18 | 2762136 Conman
Conman's picture

Nah no inflation there, not to mention all toll roads ways and tunnels/bridges in the area went up by 100% at the least. Where is this magical non-inflation or did the fed buy out webster and change hte definition?

Tue, 09/04/2012 - 18:16 | 2762130 negative rates
negative rates's picture

Dang, and I just put a lot money down on that car too.

Tue, 09/04/2012 - 18:18 | 2762137 Schmuck Raker
Schmuck Raker's picture

How long before they cancel their order for Boeing jets...

http://www.bloomberg.com/news/2012-06-30/boeing-freighter-sales-drought-...

Tue, 09/04/2012 - 18:21 | 2762146 SAT 800
SAT 800's picture

Not very long; and an excellent thing to watch.

Tue, 09/04/2012 - 18:20 | 2762139 SAT 800
SAT 800's picture

"Weakness in Global Economy, more than expected---"  Ha, Ha. Just wait, you haven't seen anything yet. You're gonna see "weakness" that'll make your eyes fall out.

Tue, 09/04/2012 - 18:24 | 2762163 Tinky
Tinky's picture

While they obviously aren't immune to the coming storm, I must say that, having used them over many years, FedEx is an exceptionally reliable and well-run company.

Tue, 09/04/2012 - 18:32 | 2762203 pursueliberty
pursueliberty's picture

Yes they are.  I only have a problem with the next day deliveries coming out of memphis when it is pretty big rainstorm.

Tue, 09/04/2012 - 18:24 | 2762164 Racer
Racer's picture

and naturally futures are up on all this dreadful news of a slowing eCONomy

Tue, 09/04/2012 - 18:24 | 2762169 asteroids
asteroids's picture

OIH:FDX chart says that FDX is rolling over. But wait Obama will save you! He'll print more money and ship it using Fedex to pay for the people's food, gas, and mortgages. Maybe kick in a few bucks to help you buy a Volt.

Tue, 09/04/2012 - 18:47 | 2762272 tu-ne-cede-malis
tu-ne-cede-malis's picture

Come on Ben, hurry up and print.  This one-ply stuff is getting expensive!

Tue, 09/04/2012 - 18:57 | 2762328 Boilermaker
Boilermaker's picture

ES down almost a FULL POINT!!!

Right, like this is going to have an effect at this point in the game.

Tue, 09/04/2012 - 19:09 | 2762383 Catflappo
Catflappo's picture

Sorry I am new to the site.... is this about Roger Federer?

Tue, 09/04/2012 - 19:13 | 2762400 Meesohaawnee
Meesohaawnee's picture

and wall street just can figure out why not a soul wants anything to do with this joke,,agh.. excuse me, market

Tue, 09/04/2012 - 19:13 | 2762403 YesWeKahn
YesWeKahn's picture

QE3, lets print.

Tue, 09/04/2012 - 19:17 | 2762417 Quantum Nucleonics
Quantum Nucleonics's picture

From the mid-point of their guidance, that's a 4% drop in earnings, which is as big as in 2008, and translates to a 1% quarterly gdp drop.  If that correlation holds, ouch!

Tue, 09/04/2012 - 19:37 | 2762511 Jlmadyson
Jlmadyson's picture

That means we are at 0% range again.

 

So here we go again. Hold on tight.

Tue, 09/04/2012 - 19:26 | 2762455 Darkness
Darkness's picture

FDX did not hit "Lows of the Year". Please see Jun 5th for FDX's actual lows. 

Tue, 09/04/2012 - 19:28 | 2762464 LooseLee
LooseLee's picture

BULLISH! For equity BULLTARDS! Ha, Ha!

Tue, 09/04/2012 - 19:39 | 2762516 joshtree
joshtree's picture

This  is good news for the equity.   QE3, here we come

Tue, 09/04/2012 - 19:50 | 2762586 Heroic Couplet
Heroic Couplet's picture

Good. Who says Fed Ex is an indicator of anything? We have a chance to learn the difference between money, which is the sole province of banks, and wealth, which has almost nothing to do with money or banks.

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