FedEx Corporation (NYSE:FDX) posted an earnings miss before opening bell this morning, but it wasn’t all bad news. The company raised its guidance for the next quarter slightly. FedEx reported second fiscal quarter profits of $500 million or $1.57 per share—a 14% increase from the same quarter a year ago. Last year’s quarter was reported to be $438 million or $1.39 per share. However, the company noted that last year’s results had an approximately 11 cent per share negative impact because of Superstorm Sandy.
The shipping company’s revenue was reported to be $11.4 billion—a 3% increase from the same quarter a year ago. Consensus estimates indicated that analysts had been expecting FedEx to report earnings of $1.64 per share on $11.44 billion in revenue.
FedEx reports declining revenues at Express Delivery
According to this morning’s release, FedEx Corporation (NYSE:FDX) saw revenues at its Express Delivery division decline. That division is the company’s largest, and the decline suggests that customers are opting for shipping methods which are slower and less expansive rather than the fast, pricey delivery offered by FedEx.
Revenue for the Express Delivery division fell to $6.84 billion, compared to last year’s reported $6.96 billion. FedEx Corporation (NYSE:FDX) did note growth in its ground shipping division, which increased 10% to $2.85 billion during the quarter.
FedEx’s results are key numbers for the economy
The company also raised its full-year adjusted earnings growth slightly to between 8% and 14%. That’s compared to its previous estimates of between 7% and 13%. This slight increase could be seen as good news for the holiday shopping season, suggesting that it could be strong. FedEx’s earnings are generally seen as a sign of the overall economy because the company’s results provide a picture of economic picture in the U.S.
As of this writing, shares of FedEx Corporation (NYSE:FDX) were down nearly 1%. So far this year, however, the company’s stock has risen more than 50%, significantly beating the S&P 500, which has increased approximately 25% over the same time frame. That’s according to data from Thomson Reuters.