NEW YORK (TheStreet) - FedEx (FDX) shares have risen a lofty 40% over the past 12 months versus its package delivery rival UPS (UPS) , which has gained 9.1%. It has also outperformed the S&P 500, which is up 17.5% in the same time period.
The Memphis, Tenn.-based delivery and logistics company reports first quarter earnings on Wednesday, where it will update investors on whether it is on track to meet the profit forecast it set for 2015.
Analysts, on average, expect FedEx to report fiscal first-quarter earnings of $1.96 a share, up 28% from last year's quarter. Revenue is expected to rise 5% to $11.48 billion, according to Thomson Reuters.
FedEx said during its fourth-quarter earnings in June that it expects fiscal 2015 earnings between $8.50 and $9 a share compared to 2014, when it earned $6.75 a share. The outlook assumed "no net year-over-year fuel impact and continued moderate economic growth," according to the company's earnings statement. It also said that capital spending for the year is expected to rise to approximately $4.2 billion, which includes "planned aircraft deliveries to support the company's fleet modernization program and continued expansion of the FedEx Ground network."
"With continued modest economic improvement, our results in fiscal 2015 should benefit from base performance improvement and ongoing execution of our profit improvement initiatives at FedEx Express, continued profitable growth at FedEx Ground and FedEx Freight, and our share repurchase program," Alan Graf, Jr., FedEx's chief financial officer said in the earnings release.
FedEx shares dropped 0.19% to $153.75 on Tuesday. Here's what analysts are saying about FedEx leading up to earnings:
Scott Schneeberger, Oppenehimer (Outperform; price target upped by $4 to $172)
We're increasing F1Q15E/FY15E/FY16E EPS in anticipation of solid F1Q15 results. We view favorable drivers to include: 1) B2C tailwinds via e-commerce growth in Ground; 2) improving B2B Ground package/Freight volume growth supported by expanding manufacturing activity/rebounding economic climate; and 3) continued margin expansion in Express via improving global air freight volumes/mitigated "trade-down"/fuel surcharge tailwinds/internal efficiency progression. Furthermore, we view FDX potentially having completed its existing share repurchase authorization (5.3M shares at 5/31/14) and announcing incremental planned activity. Modeling a flat forward share count, this could represent upside to our FY15E-FY16E EPS if announced/executed. Drawn to FDX's multi-year profit improvement story, we're introducing FY17E EPS and increasing our target from $168 to $172.