Barclays Analyst: FedEx Doing A Lot Of Things That 'Aren't Macro-Contingent'

FedEx Corporation FDX came out with worse than expected fourth-quarter results prior to market opening on Wednesday, following which its shares took a beating at the open.

Brandon Oglenski, transportation analyst at Barclays, was on CNBC post the earnings release to weigh in on the results.

Hit By FX

"We believe the industrial economy in the U.S. has really slowed down in the last six to nine months," Oglenski began. "First it was really driven by energy, but now FX has really hit the industrial segments here in the U.S.

"And as much as FedEx and everyone wants to tell about online commerce and e-commerce packages, a lot of their core profitability still comes from industrial productions. So, I think that’s their broader issue in the near-term."

Related Link: FedEx Q4 Sales Miss Views, Shares Fall

He went on, "I think what FedEx was trying to articulate on the call today is that they are doing a lot of things that aren’t really macro-contingent. They are trying to cost out of their domestic system. They are renewing with new aircraft. They are focused on higher value shipments and focused on pricing. And that should drive some margin improvement in the back half of the year. But obviously, a fickle Wall Street is going to say, ‘Well, do we really believe that growth in the back half of the year?’”

Showing Real Traction

On Barclays Equal-Weight rating, Oglenski said, "For a long time we have been talking about FedEx and the real ability for its management team to take costs out of their system. They run close to twice the cost on their Express business relative to UPS.

"But I think FedEx is starting to show some real traction here and improving those margins. Really kind of agnostic of where the economy is," Oglenski concluded.