FedEx Drops on Lousy Guidance

One year ago, I listed FedEx (FDX) as a stock to sell immediately. Since then, the stock is down about 35%, and I don’t see things getting much better any time soon.

The company just announced earnings for its fiscal fourth quarter (ending in May). The earnings report was pretty good–64 cents per share compared with Wall Street’s consensus of 51 cents a share. The problem, however, was the company’s future guidance.

Wall Street was expecting earnings of 70 cents per share for the current quarter. Instead, FedEx said that earnings will range between 30 cents and 45 cents per share. The company also failed to give full-year guidance for this year.

CEO Fred Smith said that economic conditions are the worst they’ve been in the company’s history. I continue to rate FedEx a Sell.

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