Why FedEx Is Slumping Even After Posting Positive Results? Raymond James Analyst Answers

Logistics and transportation giant FedEx Corporation FDX came out with better than expected third-quarter results on Wednesday. The company reported $2.01 as EPS for the quarter, higher than the $1.88 EPS estimated by analysts. However, shares of the company took a beating in early trade.

Art Hatfield, Transportation analyst at Raymond James was on CNBC post the result declaration to break down the quarterly numbers from FedEx.

Doing Well In E-Commerce

"The 7 percent number … is in their ground parcel business and that was really helped by e-commerce over the holiday season," Hatfield said. "So, they are really doing well in that segment, they are taking a little bit of market share and just the overall growth in e-commerce really propelled that 7 percent number in the fiscal third-quarter."

Reason For The Fall

Hatfield was asked what caused the stock to fall at the opening even though the results are majorly positive. He replied, "Well I think the initial reaction was due to the headline number for Q3. The $2.01 number was much better than what the Street was looking for at $1.88, slightly better than what we were looking for at $1.97."

"But then the company did lower the high-end of their guidance for the fiscal year by a nickel, down to $1.95 from $9[probably meant $2] and everybody looks at the beat in Q3, the reduction in full year and they got to take down fourth-quarter numbers. So, I think that's the reaction you are getting post the positive reaction on the headline number," Hatfield concluded.