Industrials

FedEx Poised for Fiscal 2025 Margin Growth as Express Unit Shines, UBS Says

FedEx (FDX) fiscal Q3 earnings surpassed expectations due to Express’ operating income benefiting from lower-than-expected incentive compensation accrual and effective capacity utilization in ground and freight networks to mitigate the impact of Memphis snowstorms, UBS said in a note Friday. Express is set up for significant margin improvement in fiscal 2025 as it overcomes headwinds from lower international yields and reduced postal service activity, according to the note. UBS said it expects FedEx to benefit from tailwinds due to general and administrative savings and Europe business enhancements, despite uncertainties in inflation and demand. The investment firm increased the price target on FedEx shares to $340 from $323 and reiterated its Buy rating. The company shares were up 8% in recent trading.

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FedEx Posts Better-Than-Expected Q3 Earnings

FedEx is one of the most mentioned companies in the U.S. across all news items in the last 12 hours, according to Factiva data. For its fiscal third quarter, FedEx reported adjusted earnings of $3.86 a share on sales of $21.7 billion. Analysts polled by FactSet expected adjusted earnings per share of $3.43 on sales of $21.97 billion. The company said it benefited from savings due to restructuring efforts including workforce reductions and facility closures. FedEx plans to purchase $500 million of shares in the fiscal fourth quarter and its board authorized a new $5 billion stock-buyback program. Share are up 7%. Dow Jones & Co. owns Factiva.

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CFRA Cuts View On Shares Of Fedex Corporation To Sell From Hold

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target price of $261, cut by $2, reflects a 12x multiple of our FY 25 (May) EPS estimate, in line with FDX’s historical forward average. We lift our FY 24 EPS estimate by $0.09 to $17.78 and trim FY 25’s by $0.20 to $21.72. Feb-Q EPS of $3.86 vs. $3.41, beat consensus by $0.38. Revenues of $21.7B were 1.6% below consensus (and -1.9% Y/Y), so the large EPS beat is on margin expansion via cost cuts. The revised FY 24 EPS guidance range ($17.25-$18.25) leaves the midpoint unchanged, but tightens the range by $0.25 on either end. The Express segment yielded adjusted operating margins of 2.5% (up by 130 bps), but volumes in Express were still down, and volumes were only flat in Ground. We

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Accenture May Gain From AI Opportunities Despite Macro Challenges, RBC Says

Accenture (ACN) is grappling with a difficult macro environment, but its unique position to provide digital transformation at scale and its balanced capital redeployment support a higher valuation, RBC Capital Markets said in a report emailed Friday. The brokerage said it reduced its fiscal 2024 and 2025 estimates following the company’s fiscal Q2 results and fiscal 2024 guidance reduction. For fiscal 2024, RBC now expects adjusted earnings of $12.05 per share and revenue of $65.1 billion, down from its previous forecasts of $12.25 per share and $65.5 billion. For fiscal 2025, it now projects adjusted EPS of $12.85 on revenue of $68.2 billion, down from its previous estimates of $13.10 per share and $68.7 billion. The “challenging” demand environment “is constraining budgets to be allocated towards larger transformations, which we note converts to revenue slower than smaller deals,” it said. RBC has outperform rating on the company’s stock and raised

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Accenture Touts AI Growth, but Stock Sinks as Outlook Is Cut Due to Demand Shift

By Tomi Kilgore Accenture expects $600 million in the second quarter for new bookings for generative AI and sees its AI workforce doubling in two years Accenture PLC investors were having their worst day in four years on Thursday, after the management consultant cut its full-year earnings outlook as clients pull further bank on spending and as corporate decision-making continues to get delayed. Meanwhile, the company (ACN) touted its growth in the market for generative artificial intelligence, saying it plans to double its AI workforce over the next two years. New bookings for generative AI totaled more than $600 million during the fiscal second quarter. That brings total bookings to $1.1 billion for the first half of the fiscal year, “to extend our early lead” in the genAI market, Chief Executive Julie Sweet said. “We now have over 53,000 skilled data and AI practitioners, against our goal of doubling our

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Accenture (NYSE:ACN) Q2 2024 Earnings Conference

The following is a summary of the Accenture Plc (ACN) Q2 2024 Earnings Call Transcript: Financial Performance: Accenture Plc reported Q2 earnings with bookings valued at $21.6 billion and revenue of $15.8 billion, which remained similar to the previous year. The quarter’s operating income was reported at $2.2 billion, indicating a margin of 13.7%, a slight drop from the prior year. The EPS (Earnings per Share) for the quarter were $2.77, showing a 3% growth from the preceding year. The company produced a free cash flow of $2 billion and returned $2.1 billion to shareholders via share buybacks and dividends. For the Q3 2024 projections, they anticipate revenues to be between $16.25 billion to $16.85 billion, and full-year 2024 revenues are expected to show a growth of 1-3%. Business Progress: The company experienced a major uptick in client engagement, registering 39 clients with quarterly bookings higher than $100 million. Accenture

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CFRA Maintains Buy Recommendation On Shares Of Accenture Plc

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We reduce our target by $27 to $387, 28.5x our FY 2025 (Aug.) EPS view, above peers and ACN’s three-year historical average (~26.5x) on its leadership in GenAI and strong balance sheet, but below our prior multiple (30x) on a softer growth outlook and lower cash balance ($5.1B, down $2.0B Q/Q). We lower our FY 2024 EPS view by $0.20 to $12.14, FY 2025’s by $0.24 to $13.57, and FY 2026’s by $0.05 to $15.15. ACN posted Feb-Q sales of $15.8B (flat Y/Y) and EPS of $2.77 (+16%) while lowering its FY 2024 guide slightly on pressure from smaller (more discretionary) projects. Areas that have struggled industry-wide remained soft, with CMT sales ($2.66B) down 8% Y/Y, Financial Services sales ($2.81B) down 6%, and overall Consulting sales ($8.02B)

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Accenture Suffers From Stormy Conditions in IT Services

Accenture is getting hit by a stormy environment in IT services. SIG Susquehanna analyst James Friedman says in a research note that IT services may be getting hurt as companies prioritize spending on other software. He also sees potential weakness in the sector from pricing pressure due to automation and delays in orders because of generative AI. “There is something in the weather for IT Services, and even Accenture is getting wet,” Friedman says. He says there isn’t enough upside and downgrades the stock to neutral from positive. Shares fall 9.1%, to $345.98.

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FedEx Reports Higher Third Quarter Diluted EPS of $3.51 and Adjusted Diluted EPS of $3.86

FedEx Reports Higher Third Quarter Diluted EPS of $3.51 and Adjusted Diluted EPS of $3.86 Operating Income Up 19% Year Over Year; Up 16% on an Adjusted Basis Reduces Capital Spending Forecast Plans Additional $500 Million Share Repurchase in Fourth Quarter Board of Directors Authorizes New $5 Billion Share Repurchase Program Narrows Full-Year Earnings Outlook Range MEMPHIS, Tenn.–(BUSINESS WIRE)–March 21, 2024– FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the third quarter ended February 29 (adjusted measures exclude the items listed below): Fiscal 2024 Fiscal 2023 —————————- —————————- As Reported Adjusted As Reported Adjusted (GAAP) (non-GAAP) (GAAP) (non-GAAP) ————- ————- ————- ————- Revenue $21.7 billion $21.7 billion $22.2 billion $22.2 billion Operating income $1.24 billion $1.36 billion $1.04 billion $1.17 billion Operating margin 5.7% 6.2% 4.7% 5.3% Net income $879 million $966 million $771 million $865 million Diluted EPS $3.51 $3.86 $3.05 $3.41 This year’s and last

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