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THE ONLY NEWS YOU NEED TO KNOW TODAY

17 June 2009 by Cullen Roche 1 Comment

The market is rallying in the face of relatively awful news out of FedEx.  Of course, the pumpers and permabulls are pointing to FDX’s “better than expected” bottom line as fuel for their agenda, but a practical look at the FedEx quarter shows just how bad things really were.   A quick glance at their most recent 8K tells the whole story.

I am going to focus on the revenues because this is where the organic growth (or lack thereof) is.  The bottom line can be tinkered with and adjusted through various accounting and business changes.   Analysts were expecting revenue of $8.32B this quarter.   FDX reported $7.85B – a staggering $500MM miss.  Total Express Revenues were down 25% while Freight was off 28% (both of which are in-line with recent rails data we’ve been seeing).  Why does this matter?  FDX is the middleman in business transactions in the economy.  Readers want to know why I am fixated on rails data and such?  This is why.  If FDX is reporting weak revenues it means that producers aren’t shipping and consumers aren’t ordering.  It’s just that simple.  This isn’t rocket science here.  It’s just plain common sense (of which the green shoots theorists are displaying very little of lately).

fdx

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Comments
  • Divided States of America

    I agree that its not rocket science but a lot of realist and logical people have lost a lot of money the last few months due to the heavy hands of the Government. I wish I was in a coma and just woke up last week and went short instead of doing so the last 3 months.

    The markets look a bit tired now….kinda coincidental that it occured a few days before GS plans to repay their TARP money? If all the banks plan on doing that, this market can go lower as they were using the TARP to drive the markets higher and need to raise cash to repay.

    06/17/2009 at 12:57 PM