I'll talk about this more in a couple of weeks as we'll have a better viewpoint when UPS ( UPS) reports results for its second quarter. But just from looking at UPS' April quarter, freight grew just 1%, while profits were down $23 million. Likewise, I don't believe it's accurate to suggest that FedEx is being outperformed by YRC Worldwide ( YRCW), which also saw 4.5% revenue decline in its freight business in its May quarter.

In terms of profitability, FedEx delivered. Adjusted earnings-per-share advanced 7% year over year to $2.13, which was enough to beat expectations. I don't believe that the Street has given management enough credit growing free cash flow (FCF) by close to 60% due to aggressive cost controls. While I've once criticized this company for not producing enough FCF, this time management delivered.

Accordingly, I'm willing to excuse the 41% drop in operating income, which included several one-time charges related to the continuing restructuring. While a profit decline of 41% is nothing to sneeze at, let's not also discount that the adjusted numbers revealed improved margins and double-digit growth in income. Here again, this shows that the Street is not assessing FedEx's total performance relative to its restructuring plans.

I'm not by any means making excuses for this company. But as I've said recently, analysts' expectations remain too high. While management is battling sentiment to keep those expectations in check, FedEx's long-term commitment to better performance shouldn't be overlooked.

Let's not also forget that aside from internal reorganization projects, there are also global economic challenges that are outside of management's control. As noted, FedEx is not the only company that is experiencing weak shipping volumes. With that in mind, I believe that investors should remain patient and allow management to execute its long-term strategy and produce value. But regardless of what the Street may believe, it's not going to be an "overnight" delivery.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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