FedEx Corporation's Q4 Earnings Preview

Jun.12.13 | About: FedEx Corporation (FDX)

FedEx (NYSE:FDX) is scheduled to release its 1st-quarter 2013 earnings on Wednesday, June 19. Below I have highlighted this quarter's earnings estimates as well as provided a fundamental look at the company's financial position and valuation.

Profile and Estimates

FedEx has a market cap of $31.62 billion and had annual sales last year of $42.6 billion. Shares currently trade for $99.78 and are up 8.93% YTD, 19.25% over the past 52 weeks and down 9% from their March high of $109.66 per share. Analysts have a mean price target of $114.74 and a median price target of $117.00 on the shares. Last quarter, the company's EPS of $1.23 was $0.15 below the street's expectations, the company's second earnings miss in a row.

This quarter analysts on average are expecting EPS of $1.97 on revenues of $11.45 billion. As you can see below, FedEx has slightly outperformed shares of UPS but both fall below the 23.97% 52-week gain of the S&P 500.

^SPX Chart

^SPX data by YCharts

Analysis (data sourced from MorningStar.com)

(click to enlarge)Click to enlarge

As you can see from the operating efficiency above, and the graph below, revenues have steadily risen over the past few years but net income has recently started to fall due to rising costs. Return on assets has also slowly fallen as the asset base of the company has grown at a faster pace than revenues and some of the higher return on equity is attributable to the higher leverage taken on by the company. FedEx's liabilities have grown 29% over the past five quarters to $15.7 billion.

FDX Net Income Quarterly Chart

FDX Net Income Quarterly data by YCharts

Dividends and Shares

FDX Shares Outstanding Chart

FDX Shares Outstanding data by YCharts

Over the past five years the number of shares outstanding has increased with no significant change/dilution since the end of 2011. During that same time, the company's dividend has increased to its current $0.60 per share, good for a yield of 0.56%.

Bottom Line

Managing costs will continue to be the company's goals as its large moat leaves most competitors in the dust. The company has been focusing lately on modernizing its aircraft fleet by retiring less-efficient and older planes, which is a good move considering its new express air contract with the United States Postal Service, worth $10.5 billion. Keep an eye out for new developments and updates on Wednesday.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.