The economy isn’t falling off a cliff just yet. FedEx raised their guidance this morning in a move that confirms much of the confounding economic strength we’ve seen in corporate earnings and recent data such as the rail freight traffic. This news comes on the heels of a very positive report from UPS just last week. These transports are key indicators of economic strength as they transport the majority of consumer related goods. FedEx was very upbeat in a report released this morning:
“Our revenue and earnings growth are exceeding original expectations, primarily due to better-than-anticipated growth in FedEx Express and FedEx Ground volumes. Our package volume growth rates in our first quarter are continuing at a pace similar to our fourth quarter. Of particular benefit to our earnings is the continued strong demand for our higher-margin FedEx International Priority® (IP) package and freight services, with IP package volumes expected to grow more than 20% again this quarter. Customers are favorably responding to our superior service offerings, the capabilities of our unparalleled global network and the best-in-market cut-off times we now offer from numerous points in Asia.”
Of course, when gauging the earnings game you have to consider the incredible ineptitude of the analyst community, however, this news is hard to be viewed as anything but a near-term positive.