Fedex are out with their Q1 2014 earnings and they are shipping some good news to the market.
- EPS $2.10 vs $1.96 exp
- Revenue $11.70bn vs $11.47bn exp
- Express shipping rev +4.0%
- Ground shipping rev +8.0%, Average daily volume +6.0%
- Freight +13.0%
- Sees express shipping rates rising an average of 4.9%
Better numbers for the logistics firm which also came on the back of lower pension expenses and profit improvement programs (cost cutting in real terms)
Logistic companies like Fedex are a good proxy for overall economic activity, especially in the manufacturing, production & retail industries as suppliers have to get their goods to customers. One of the first areas that takes a bashing in a slump or slowdown is shipping costs. Buyers trim back ordering frequency and for sellers it’s usually the first place they look at top cut costs. Signs that volumes are up and that there’s confidence in raising prices goes along way to adding to the positive economic picture in the US
