The media likes to say that earnings season officially starts when Alcoa reports, but I never thought that was very accurate. Things really get kicked off with FedEx, one of the most important economic bellwethers around. This morning’s earnings give us a little glimpse into the state of the economy. Here are some key takeaways:
- Revenue growth has slowed to 2%, which is consistent with the macro trend we’re seeing.
- Operating income was up 7% and margins expanded. Corporations are maintaining margins for the most part.
- They’re assuming US GDP growth of 2.1% and global growth of 2.6%. That’s down from 2.3% & 2.7% expectations last time we heard from FedEx.
- The global economic environment was described as “tepid global economic growth”.
Overall, it sounds like more muddle through to me.