Higher Q1 deliveries likely to lift FedEx stock

FedEx (FDX) is going to announce the results a day ahead of the original schedule. The company is set to release its first-quarter earnings today after the market close. The packaging delivery giant is likely to post earnings and revenue ahead of the analysts’ expectations with a rise in the deliveries.

Analysts, on average, predict FedEx to report earnings of $3.83 a share compared to a $2.51 per share profit reported in the last year. Revenue is anticipated to rise by 10.30% to $16.88 billion. Most of the analysts suggested a “strong buy” or “buy” rating with an average price target of $286.24.

FedEx has been struggling to cope up with its competitor United Parcel Service (UPS), which announced transformation initiatives for a profitable growth in the bottom line. In addition, worries have been mounting for FedEx as the online giant Amazon (AMZN) is bringing its own shipping and logistics base.

Investors will be keen on watching the company’s conference call and look for the long-term plans of the management to combat Amazon.

In the recent fourth-quarter, profit climbed 10.7% helped by broad-based revenue growth and favorable exchange rates. Revenue grew 10% driven by strong growth in e-commerce deliveries in its FedEx Express segment, as well as higher revenues from FedEx Ground and Freight.

For fiscal 2019, the company had expected adjusted earnings of $17 to $17.60 per share and revenue growth of 9%. FedEx said it remained committed to improving operating income at the FedEx Express segment by $1.2 billion to $1.5 billion in the fiscal year 2020 compared to 2017.

The shipping giant has beat analysts’ expectations in the past three consecutive quarters and analysts are looking for a 52.20% year-over-year growth in earnings for the first quarter.

Shares of FedEx ended Friday’s regular session up 0.90% at $255.44 on the NYSE and opened in the positive territory today. The stock had risen by 2.4% so far in this year and about 19% in the past year.