FedEx Delivers Profitability

And, KB Home's average sales price.

Today is Thursday, September 21, 2023.

The Early Bird Index today is 55.27.

New to this newsletter? Sign up here.

FedEx Delivers Profitability

Transportation giant FedEx (NYSE: FDX) rose 5.77% in after-hours trading on Wednesday after posting mixed financial earnings results.

Financials: FedEx reported earnings of $4.55 per share in the past quarter, which was better than expected. But revenue only reached $21.7 billion, which was below estimates.

Slower Growth: Operating income for FedEx Freight dropped 26% due to lower fuel surcharges and shipments.

Yes, But: FedEx Ground dominated the quarter with a 59% increase. FedEx Express improved by 18%. The company attributed the stronger performances to reduced operating expenses. Months ago, the company started a transformation initiative called DRIVE that was aimed at cutting costs. Apparently, that program is working across the board.

Quote: “FedEx is well-positioned to continue to deliver improved profitability while becoming an even more flexible, efficient and data-driven organization.” - Raj Subramaniam, FedEx CEO and President.

Outlook: FedEx lowered its revenue forecast and now expects flat revenue growth. However, the company raised its forecast for earnings per share.

Stock Price: FedEx is up 41% this year, but down 3% in the last 30 days.

Final Thoughts: Investors are pleased that FedEx is cutting costs, but there is some concern over the company’s declining freight business.

Notables

Notable Earnings Today: Darden Restaurants (NYSE: DRI), Flux Power Holdings (Nasdaq: FLUX), FactSet (NYSE: FDS), Scholastic (Nasdaq: SCHL), Valneva (Nasdaq: VALN).

Notable IPOs Today: Greenfire Resources Ltd. (NYSE: GFR), MDB Capital Holdings, LLC Class A common (Nasdaq: MDBH), American Battery Technology Company Common Stock (Nasdaq: ABAT), Western Asset Bond ETF (Nasdaq: WABF).

Notable Equity Crowdfunding Campaigns Ending Today: AVACEN Medical (StartEngine).

Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Philadelphia Fed Manufacturing Index (8:30 a.m. ET), Philly Fed Employment (8:30 a.m. ET), Current Account Deficit (8:30 a.m. ET), Existing Home Sales (10:00 a.m. ET), Fed's Balance Sheet (4:30 p.m. ET).

Sponsored
Stock Market RundownYour daily 3-minute morning read with an amusing angle on business and the stock market. Learn, laugh, stun your friends with your knowledge.
Sponsored
Bitcoin BreakdownBitcoin-only focused newsletter with the highest signal-to-noise ratio in the space, carefully curated by an alien from the future.

KB Home's Average Sales Price

Despite posting better-than-expected financial results, shares of KB Home (NYSE: KBH) dropped by 2.21% in after-hours trading on Wednesday.

Financials: KB Home reported earnings of $1.80 per share in the past quarter and revenue of $1.59 billion; both were better than expected.

Problems: Revenue, homes delivered, and average selling price declined year over year. Homebuilding operating income nearly got cut in half.

Yes, But: KB Home still projects a more profitable 2023 fiscal year than what was previously anticipated.

Final Thoughts: KB Home is up 48% this year. Demand for housing still outweighs supply, which is good for KB Home. However, investors are worried about the average sales pricing dropping.

D.R. Horton’s New CEO

Home construction company D.R. Horton (NYSE: DHI) announced that COO Paul J. Romanowski has been promoted to CEO, effective October 1, 2023.

Final Thoughts: D.R. Horton is up 24% this year. Just like with KB Home, D.R. Horton is facing a market where demand is greater than supply.

Trends to Watch

Disbelief: Don’t Buy the Fed’s Rate Projections (Wall Street Journal)

Thank you for reading!

Forward to a friend and tell them to sign up here.

Want more investing tips? Listen to the podcast.

Show Your Support: Buy Me a Coffee.

Questions or comments? Hit reply to reach out.