FedEx: A Proxy for the Economy?

Fedex (FDX) announced results Thursday and let the world know they did slightly better than expectations. (See earnings call transcript.)The cost of fuel moderated somewhat, and therefore profitability was just that much better.

In reading the earnings release, which is a painfully abbreviated document, and then reading the earnings call transcript I am beginning to get the sense that the executives are attempting to seduce the investing public into thinking that they are an economic proxy.

By this I mean they point to fuel costs, weather conditions and underlying economic conditions to explain results. There is almost no discussion of competition or the relative merits of offerings. The question becomes, well, what is management doing? If this is a proxy for the economy with a built in execution risk, why not just buy an ETF or index and factor out company specific risk?

Management needs to continue building the case for continued investor involvement.

Comments

[jegan ;-)]

I've heard for the last couple of years that FedEx is a proxy for the economy (as I have about GE).... The most recent airing of this view was Guy Adami on Fast Money about 2 months ago.... Seems to me the market has already pegged them as a bellweather. Maybe they just recognize that perception and are wording their reports to accommodate investor's perception. I can't figure out why any company would actively pursue this particular spot. It seems to me that it would just make your stock price swing more erratically than normal.

jegan ;-)

[redracer3368]

I wouldn't invest a dime in this company, I work there so I should know. They are squeezing the workers to work faster because of reconfiguration of traffic lanes. It has put us in a critical time box on meeting outbound service times. They have a quarterly goal oriented pay out that the management keeps adding stuff to making it harder to achieve the maximum payout. My job used to be fun but not anymore. I am a driver to is forced to work the dock and I am sick to death of it. If the pay wasn't so good I would quit even after 15yrs.