By Carl Delfeld of ETF Passport
FedEx (ww.bestwaytoinvest.com/quote/fdx">FDX), a constituent of the Global GNP 30 portfolio, buoyed markets and strengthened the case for a full blown global recovery after it reported this week that quarterly profit more than doubled, with strong Asian export volumes more than compensating for flat domestic demand.
Led by exports from Asia, FedEx reported an 18 percent jump in volume from its International Priority business. But average daily domestic package volume rose just 1 percent, reflecting the weak American economy. FedEx raised its 2010 earnings forecast to a range of $3.60 to $3.80 a share from a previous outlook of $3.45 to $3.75. Analysts on average expected $3.64, according to Thomson Reuters.
The company said profit for the third quarter, which ended Feb. 28, rose to $239 million, or 76 cents a share, from $97 million, or 31 cents a share, a year earlier. That bested the analysts’ average estimate of 72 cents a share.
“An improving global economy drove solid financial performance in the quarter,” Fred Smith, the company’s chief executive, said during a conference call with analysts. “In fact, the recovery is broadening.”
FedEx and U.P.S. handle such a huge chunk of American and global shipping that they are considered economic bellwethers.
A press release mentioned that FedEx also raised its capital spending outlook for 2010 to $2.9 billion, from $2.6 billion, citing additional investments in Boeing aircraft. And it said it was taking aircraft out of storage in the desert for a return to service. Great and welcome news all around.
The Global GNP 30 is a basket of stocks with a geographic distribution roughly equal to each region's share of global GNP. It has handily outperformed its benchmarks; the Dow Jones Industrial Average (DIA) and the S&P Global 100 (IOO).
For more information, please contact Carl Delfeld at Carl@ETFpassport.com.
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