Ahead of the Bell: FedEx hikes forecast; shares up

AP News
|
Posted: Dec 08, 2009 8:23 AM

Shares of FedEx Corp. edged higher in premarket trading Tuesday after the package-delivery company raised its earnings forecast for its fiscal second quarter.

The Memphis, Tenn., company said Monday that for the quarter ended Nov. 30 it expects to report profit of $1.10 per share, up from a previous forecast of earnings between 65 cents and 95 cents per share.

Analysts had expected FedEx to earn 85 cents per share in its fiscal second quarter, according to Thomson Reuters.

Shares rose $2.08, or 2.4 percent, to $89.60 ahead of Tuesday's market open.

FedEx said growth in U.S. overnight express and international priority services increased each month during the quarter, helped by inventory restocking. Demand for international services improved, particularly in Asia and Latin America.

Morgan Keegan analyst Art Hatfield boosted his second-quarter earnings estimate to match FedEx's outlook. He also lifted his estimates for the rest of the fiscal year.

Hatfield maintained his "Market Perform" rating, however, saying expectations for solid results are already reflected in FedEx's stock price. He also noted that the rebuilding of inventories which is helping drive FedEx's sales may have "by and large played out, or may subside considerably in the next couple of months."

FedEx is scheduled to report second-quarter results on Dec. 17.