November 12, 2025 10:00 PM GMT As multipolar world dynamics continue to drive the reshoring of supply chains, the implications for global logistics are profound. Our regression analysis points to a lower structural growth algorithm for ocean container throughput, with truck freight the outright beneficiary. Key Takeaways Exhibit 1: We introduce a 3-part series where we plan to unpack some of the strategic debates in Logistics as it relates to reshoring and the multipolar world. The first focuses on Modal Sh ...

Core Viewpoint - FedEx Corporation reported mixed results for Q3 fiscal 2025, with earnings per share missing estimates while revenues exceeded expectations, leading to a lowered earnings outlook due to weak economic conditions [1][4][6]. Financial Performance - Q3 earnings per share were $4.51, missing the Zacks Consensus Estimate of $4.65, but improved 16.8% year over year due to cost-reduction benefits from the DRIVE program [4]. - Revenues reached $22.2 billion, surpassing the Zacks Consensus Estimate of $21.8 billion, and increased by 2.1% compared to the same quarter last year [4]. Economic Challenges - The quarterly performance was impacted by a shortened holiday season, adverse weather, an early Chinese New Year, and rising recession fears due to tariff-related tensions [5]. - FedEx now anticipates revenues to be flat to slightly down year over year, revising its adjusted earnings outlook to a range of $18-18.6 per share from the previous $19-20 per share [6]. Market Reaction - Following the earnings miss and lowered guidance, earnings per share estimates have declined for upcoming quarters [7]. - FedEx shares have experienced a double-digit decline over the past year, although the Zacks Transportation—Air Freight and Cargo industry and rival UPS have performed worse [9]. Strategic Initiatives - FedEx is focusing on cost reduction through its DRIVE program, which is expected to yield savings of $2.2 billion in fiscal 2025 by reducing flight frequencies, parking aircraft, and cutting staff [13]. - The company raised its quarterly dividend by 10% to $1.38 per share in June 2024, indicating a commitment to rewarding shareholders despite current challenges [14]. Valuation - FedEx shares are currently trading at lower levels compared to its industry and five-year median based on the forward 12-month price/earnings ratio, with a Value Score of B [15].

Core Viewpoint - FedEx Corporation's stock is experiencing a rebound after a significant drop, indicating that the market perception of its recent earnings may be more favorable than initially thought [1]. Group 1: Stock Performance - FedEx's stock fell by nearly 6.5% on Friday but recovered to close up more than 4.5% by the end of the trading day [1]. - The stock opened near its lows but showed resilience by reversing its losses, which is considered a positive sign of market action [4]. Group 2: Market Sentiment - The initial disappointment in FedEx's earnings report may not reflect the true sentiment, as many investors began to view the numbers more positively as trading progressed [4]. - The price action suggests that there is a shift in investor sentiment, with more traders willing to buy despite the disappointing earnings [3]. Group 3: Resistance Levels - If FedEx's stock approaches the $242 level, it may face resistance, as this price point was previously a support level in June 2024 and earlier this month [4]. - Investors who purchased shares around $242 may place sell orders if the price returns to that level, potentially creating resistance and halting the upward movement [5].

Core Viewpoint - FedEx Corporation reported mixed results for the third quarter of fiscal 2025, with earnings missing estimates while revenues exceeded expectations, indicating a complex financial landscape for the company. Financial Performance - Quarterly earnings, excluding non-recurring items, were $4.51 per share, missing the Zacks Consensus Estimate of $4.65, but representing a 16.8% year-over-year improvement [1] - Revenues reached $22.2 billion, surpassing the Zacks Consensus Estimate of $21.8 billion and showing a 2.1% increase from the previous year [2] - Operating income increased by 4% to $1.29 billion, with operating margin rising to 5.8% from 5.7% year-over-year [3] Segmental Performance - The FedEx Express segment's revenues grew by 3% year-over-year to $19.1 billion, driven by cost reductions and increased export volume, although offset by higher wage rates and the expiration of a contract with the U.S. Postal Service [5] - FedEx Freight revenues fell by 5% year-over-year to $2.08 billion, impacted by lower fuel surcharges and reduced shipment volumes, despite a higher base yield [6][4] Liquidity and Capital Management - FedEx ended the quarter with cash and cash equivalents of $5.14 billion, up from $5.02 billion in the previous quarter, while long-term debt slightly increased to $19.5 billion [7] - The company completed a $2.5 billion share repurchase plan, repurchasing $0.5 billion worth of shares during the quarter, which positively impacted earnings per share by 12 cents [8] Fiscal 2025 Outlook - FedEx updated its full-year guidance, now expecting revenues to be flat to slightly down year-over-year, with EPS projected between $15.15 and $15.75, a decrease from the previous estimate of $16.45 to $17.45 [9][10]

U.S. stock futures were lower this morning, with the Dow futures falling around 100 points on Friday.Shares of Micron Technology, Inc. MU fell sharply in today's pre-market trading following second-quarter results.Micron reported second-quarter revenue of $8.05 billion, beating the consensus estimate of $7.89 billion. Total revenue was up from $5.82 billion on a year-over-year basis. The company reported second-quarter adjusted earnings of $1.56 per share, beating analyst estimates of $1.42 per share, accor ...

Financial Data and Key Metrics Changes - Revenue increased by 2% year-over-year for the first time this fiscal year, reaching a total of $XX billion [7] - Adjusted operating income grew by 12% compared to last year, with $600 million in DRIVE savings achieved in the quarter [8][22] - Adjusted EPS growth was reported at 17% [41] Business Line Data and Key Metrics Changes - Federal Express saw a revenue increase of 3%, driven by higher volume in deferred services [27] - FedEx Freight experienced a 5% revenue decline due to lower volumes and fuel surcharges [27] - Overall volume trends improved, with a 5% growth in Federal Express package volume [28] Market Data and Key Metrics Changes - Nearly 75% of revenue comes from U.S. domestic services, with 10% from non-U.S. intra-country or intra-regional services [12] - International export package volumes increased by 8% due to growth in the international economy [29] - Average daily pounds for international priority freight increased by 3% [30] Company Strategy and Development Direction - The company is focused on creating a more flexible, efficient, and intelligent network, with plans to optimize 45 more U.S. stations in Q4 [14] - The DRIVE initiative aims for a total of $2.2 billion in savings for FY '25, with a total of $4 billion from the FY '23 baseline [13] - The acquisition of RouteSmart Technologies is expected to enhance route optimization and operational efficiency [20] Management's Comments on Operating Environment and Future Outlook - The current environment adds uncertainty to demand, particularly in the industrial economy, which continues to pressure higher-margin B2B volumes [9] - The company is lowering its FY '25 adjusted EPS outlook to $18 to $18.60 due to inflationary pressures and uncertain demand [18][48] - Management remains confident in the long-term value creation from transformation initiatives like DRIVE and Network 2.0% [23] Other Important Information - The company completed approximately $500 million in share repurchases in Q3, with a target of returning $3.8 billion to shareholders in FY '25 [55] - Capital expenditures for FY '25 are now projected at $4.9 billion, down from $5.2 billion last year [55] - The company is on track to fully separate FedEx Freight, with a separation management office established [58] Q&A Session Summary Question: Impact of inflation on guidance change - Management indicated that inflation has been a consistent factor affecting guidance, particularly regarding wages and operational costs [65] Question: FedEx's exposure to de minimis shipments - Management stated they are operationally prepared for changes related to de minimis shipments and are working closely with customers to adapt [70][72] Question: Outlook for fiscal '26 - Management refrained from providing specific guidance but emphasized a focus on profitable growth and the annualization of DRIVE benefits [76][78] Question: Update on dedicated sales force - The dedicated sales team is being built to enhance expertise in LTL and improve coverage for small and medium customers [90] Question: Network 2.0% productivity benefits - Management reported solid service levels and a goal of a 10% reduction in B&D costs with the rollout of Network 2.0% [96] Question: LTL margins outlook - Management expressed confidence in LTL margins rebounding once the B2B business improves, focusing on quality growth [100] Question: Pricing environment and customer feedback - Management noted that the pricing environment remains rational, with customers anticipating price increases due to inflation [115]

Financial Performance - Revenue for Q3 FY25 reached $22.2 billion, a 2% year-over-year increase[9] - Adjusted operating income for Q3 FY25 was $1.51 billion, a 12% year-over-year increase[9] - Adjusted operating margin for Q3 FY25 was 6.8%, a 60 basis points increase[9] - Adjusted diluted EPS for Q3 FY25 was $4.51, a 17% year-over-year increase[9] Segment Performance - Federal Express revenue increased by 3% to $19.2 billion in Q3 FY25[15] - FedEx Freight revenue decreased by 5% to $2.1 billion in Q3 FY25[15] - DRIVE program delivered $600 million in structural cost savings in Q3[12, 26] Outlook and Capital Allocation - Revised FY25 adjusted diluted EPS outlook to a range of $18.00 - $18.60[12] - FY25 capital expenditure is anticipated to be $4.9 billion, down $300 million year-over-year[32] - Expect to return $3.8 billion to stockholders in FY25 through stock repurchases and dividends[32]

Core Viewpoint - FedEx Corporation is expected to report its third-quarter fiscal 2025 results on March 20, 2025, with a consensus estimate indicating a potential earnings increase despite recent downward revisions in expectations [1][2]. Financial Performance - The Zacks Consensus Estimate for earnings per share in Q3 fiscal 2025 is $4.66, reflecting a 20.7% increase from the previous year, although it has been revised downward by 1.7% in the last 60 days [2]. - Revenue expectations for the same quarter are set at $21.88 billion, indicating a 0.8% increase from the year-ago period [2]. Demand and Market Conditions - FedEx is facing challenges due to the normalization of volume and pricing trends post-COVID, compounded by geopolitical uncertainties and high inflation affecting consumer sentiment, particularly in Asia and Europe [4]. - The Express unit, FedEx's largest segment, is anticipated to experience a slight revenue increase of 0.6% compared to Q3 fiscal 2024, despite demand-induced volume weakness [5]. Cost Management Initiatives - FedEx is implementing a companywide cost-cutting initiative named DRIVE, which is expected to positively impact its bottom-line performance in the upcoming quarter [6]. - Cost-reduction measures include reducing flight frequencies, parking aircraft, and staff cuts, with salary and benefit expenses projected to decrease by 0.8% from the previous year [7]. Earnings Prediction and Stock Performance - Current analysis suggests that FedEx may not beat earnings estimates this quarter, as indicated by an Earnings ESP of -2.66% and a Zacks Rank of 3 (Hold) [8][9]. - Over the past three months, FedEx shares have declined by 11.1%, underperforming the industry average decline of 6.5% and rivals such as United Parcel Service (UPS) [10].

Company Overview - FedEx Corporation (FDX) is scheduled to report its Q3 results on March 20 after market close [1] Analyst Insights - The previous analysis of FDX stock was conducted on September 20, following the Q1 results [1] - The analyst emphasizes the importance of quantitative methods for identifying undervalued stocks across various industries [1] - The belief is that numerical data often provides a more realistic view of a company's prospects compared to narrative [1] Investment Philosophy - The analyst has been investing since 2013 and has gained knowledge from extensive reading on stock market strategies [1] - Notable books referenced include "100 Baggers," "Financial Shenanigans," and "The Quants" [1]

Core Viewpoint - Goldman Sachs analyst Jordan Alliger has lowered earnings estimates for FedEx Corporation ahead of its third-quarter FY25 earnings release, reflecting ongoing transportation challenges and volume declines in B2B parcel services [1][2][3]. Group 1: Earnings Estimates - Third-quarter EPS estimates have been reduced from $4.65 to $4.40 due to transportation challenges, particularly in industrial-exposed LTL [1]. - FY25 EPS estimates have been lowered from $18.85 to $18.65, with FY26 estimates reduced from $23.30 to $22.20, and FY27 estimates cut from $26.30 to $25.50 [2]. - The adjustments reflect uncertainty surrounding tariffs and the recovery timeline for the manufacturing and B2B sectors, aligning with broader reductions across the transportation sector [3]. Group 2: Company Initiatives and Outlook - The analyst remains optimistic about FedEx's ongoing cost-cutting efforts and investments in its LTL business, which are expected to enhance operational leverage when the industrial economy rebounds [3]. - Investors can gain exposure to FedEx through ETFs such as First Trust S&P 500 Diversified Dividend Aristocrats ETF and ProShares Trust ProShares Supply Chain Logistics ETF [4]. - As of the last check, FedEx shares are down 0.71% at $241.77 [4].