FedEx Lowers Outlook: Delivery Stocks In Trouble?
FedEx Corp (NYSE:FDX): lowered its outlook for the rest of the year, which for most companies wouldn't be the end of the world, but FedEx serves as a bellwether for US economic growth. Thus markets interpreted the news rather ominously for the economy. Reuters reports a warm winter and strong demand for on-line shopping helped to boost the shipping company's fourth quarter profits above forecast, but global growth is not large enough to sustain the rate.
In a conference call to investors, CFO Alan Graf said "The fourth quarter is still very good, but what we're seeing at the moment...is we just don't have as strong an economy as we would have hoped it would be a year ago."
FedEx's assessment was supported by newly released (and humble) manufacturing indicators from China, Germany and France. The higher cost of fuel also added to the company's woes: businesses are choosing to save money by shipping goods by truck instead of air.
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Business Section: Investing Ideas
FedEx saw its share price drop 3.46% when it announced their lower earnings expectations. So we were wondering, how did that affect others in the industry?
There are ten air delivery and freight service companies trading on the U.S. exchanges with market caps above $50 million, including FedEx.
We list them below with their price change on Thursday. Do you think the changes are fair? Overreactions? Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Air Transport Services Group, Inc. (Nasdaq:ATSG): Provides aircraft, airline operations, and other related services primarily to the shipping and transportation industries. Market cap of $362.99M. On 3/22 share price changed by 0.18% and closed at $5.67.
2. CH Robinson Worldwide Inc. (Nasdaq:CHRW): Provides multimodal freight transportation services and logistics solutions to companies in various industries worldwide. Market cap of $10.54B. On 3/22 share price changed by -0.77% and closed at $64.5.
3. Expeditors International of Washington Inc. (Nasdaq:EXPD): Provides logistics services in the United States and internationally. Market cap of $9.84B. On 3/22 share price changed by -1.26% and closed at $46.39.
4. FedEx Corporation: Provides transportation, e-commerce, and business services in the United States and internationally. Market cap of $29.09B. On 3/22 share price changed by -3.46% and closed at $92.5.
5. Forward Air Corp. (Nasdaq:FWRD): Provides time-definite surface transportation and related logistics services to the North American deferred air freight market. Market cap of $1.0B. On 3/22 share price changed by -1.39% and closed at $34.86.
6. Hub Group Inc. (Nasdaq:HUBG): Provides intermodal, truck brokerage, and logistics services in North America. Market cap of $1.33B. On 3/22 share price changed by -2.22% and closed at $35.31.
7. Radiant Logistics, Inc. (Nasdaq:RLGT): Market cap of $72.37M. On 3/22 share price changed by 0.9% and closed at $2.24.
8. Roadrunner Transportation Systems, Inc. (NYSE:RRTS): Operates as a non-asset based transportation and logistics service company. Market cap of $539.88M. On 3/22 share price changed by -1.57% and closed at $17.58.
9. United Parcel Service, Inc. (NYSE:UPS): Provides transportation, logistics, and financial services in the United States and internationally. Market cap of $76.95B. On 3/22 share price changed by -0.29% and closed at $80.28.
10. UTi Worldwide Inc. (Nasdaq:UTIW): Operates as a supply chain services and solutions company. Market cap of $1.75B. On 3/22 share price changed by 6.5% and closed at $17.04.
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Disclosure: Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.