FedEx (FDX) reported better-than-expected fiscal gains in the third quarter, as vaccine shipments increase. FedEx shares rose at the end of the session as they approached a point of purchase.
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Early, XPO Logistics (XPO) takes an important step towards breaking up its logistics business, with XPO’s stock breaking down briefly before reversing down amid the broad market liquidation.
The transport and logistics company XPO Thursday announced a new company, GXO Logistics, which will house its logistics business after a planned spin-off of that business. He also revealed a confidential form 10 form linked to the split, calling the move a significant milestone. The three letters GXO mean “opportunities to change the game” for customers.
GXO will become the second largest contracted logistics provider in the world, the company said.
XPO Logistics released the spinoff proposal last December to unlock value. It will focus on transporting less than a truck load after the separation, which is expected to be completed in the second half of 2021.
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FedEx earnings
Estimates: Wall Street expects FedEx profit to rise 128% to $ 3.21 as revenue grows 14% to $ 19.97 billion.
Results of: FedEx earnings increased 146% to $ 3.47 per share. Revenue grew 23% to $ 21.50 billion. This is the third consecutive quarter of accelerated growth for both.
Panorama: FedEx predicts 2021 tax EPS of $ 17.60 to $ 18.20 per share, excluding a variety of items, including retirement plan accounting and TNT Express integration costs.
“We expect demand for our unparalleled international express and e-commerce solutions to remain very high for the foreseeable future,” said President and CEO Fred Smith in the FedEx earnings release.
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FedEx Stock, XPO Stock
FedEx shares rose 4% in expanded trade. The stock closed at 0.9% to 263.51 in Thursday’s stock market trading. Your stock is forming a cup base with a buying point of 305.76 after clearing the 50-day line, according to analysis by the MarketSmith chart. Archrival UPS hardly changed in the end. UPS shares fell 0.3% on Thursday, after falling below the 50-day line on Wednesday.
XPO’s shares fell 1.6% to 126.30 on Thursday. after rising intraday to 131.42, only surpassing a buying point of 128.67 from a flat base or shallow cup base. FedEx and UPS stocks have delayed RS lines, while XPO’s relative strength line is close to the peak of consolidation.
As a rival UPS (UPS), which surpassed fourth quarter views in February, FedEx could profit from coronavirus vaccine shipments and a holiday shipment season fueled by volumes of e-commerce.
FedEx said that on March 1, it is preparing for the growth of vaccine volumes during the spring and summer, after the United States began distribution in December. It also started shipping the third approved vaccine, made by Johnson & Johnson (JNJ) and distributed by drug wholesaler McKesson (MCK).
“As manufacturers obtain approval to ship Covid-19 vaccines with wider temperature ranges and varying dosage distributions, we anticipate that more of these packages will be transferred to more places through our global network,” said FedEx CEO Don Colleran.
FedEx profits accelerated for two quarters, culminating in a 92% gain in the second quarter. The pandemic blockages have sparked a flurry of online shopping, which has led to price gains in various segments for the shipping giant.
But FedEx and UPS margins are being scrutinized as less profitable residential volumes increase.
Last December, FedEx acquired the e-commerce platform ShopRunner as Amazon.com (AMZN) expands its logistics and delivery business.
Amazon has become less of a customer and more of a rival to UPS and FedEx, which has reduced its relationship with the e-commerce giant.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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