FedEx Report Isn't That Bad (FDX)

FedEx Corporation FDX reported a miss this morning, reporting earnings of $1.16 per share on revenues of $9.61 billion. Wall Street was anticipating earnings of $1.32 per share on revenues of $9.72 billion. Initially, this looks like a big miss, right? Well, not really. The company had 27 cents per share in associated costs with FedEx Freight and FedEx LTL, as well as a legal charge that it's reserved $66 million for. Revenues rose 12% from last year to $9.63 billion, but operating income and operating margin fell from last year, based on these expenses. Wall Street has had a problem in the past accounting for these, and it would not surprise me to see FedEx eventually trade up today, should factors out of its control cooperate. FedEx also raised its earnings projecting for next year, saying it now sees earnings of $5.00-$5.30 per share, as opposed to its previous estimate of $4.80 to $5.25 per share. It also announced an agreement to acquire Servicios Nacionales Mupa, SA de CV (MultiPack), a Mexican domestic express package delivery company. FedEx is normally a very volatile stock when it reports earnings this time of year, and given the fact it's growing faster than UPS UPS internationally, and the knucklehead analysts on Wall Street don't know how to account for some of these charges, you may want to use the weakness to add to an existing position. Disclosure: long UPS