Shares of FedEx are down 3% at $192.80 in after market trade as the parcel delivery giant fell short of fiscal Q2 earnings estimates after the NY close today.
FedEx announced Q2 earnings of $2.80 per share on revenue $14.9 billion, while the market was expecting earnings of $2.90 with revenue climbing to $14.95 billion.
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Total operating margin shrank to 7.8% from 9.1% a year ago, due to the FedEx “Ground” unit’s network expansion and increased purchase transportation rates, as well as higher IT expenses. Looking forward, adjusted FY 2017 earnings are still seen in the $12.00 to $12.25 range.
On balance, FedEx has offered good shareholder value this year climbing over 25% since January. We would expect to see buyers at, or around, the initial support area of $173.00
