Investing in Fedex

Stark white trucks and planes carrying approximately 3.5 million packages and 11 million pounds of daily freight stream our road and airways bearing the iconic blue, green and red logo of the world’s largest express transportation corporation, FedEx (FDX). Founded in 1971 as Federal Express, the now FedEx corporation employs more than 143,000 workers globally and offers a wide range of shipping and delivery services to every US address and to more than 220 countries and territories.

The company is comprised of FedEx Express, FedEx Freight, FedEx Ground and FedEx Office with 1,057 stations (676 US and 381 outside the US) and 10 air express hubs. It is highly praised for its one and two day delivery guarantees for time sensitive material and has earned multiple awards for customer service and satisfaction. FedEx has one primary rival shipping company, the United Postal Services (UPS) and two subsidiary rivals, BAX Global (BAX) and Aramex (ARMX).

Major highlights for the company include the complete acquisition of Multipack, a Mexican domestic express package delivery corporation and the launching of domestic, next day service in Colombia’s major cities. FedEx Freight added new markets in Mexico and enhanced express service between Asia and Europe as well as broadening the reach of FedEx branded domestic services in India. The company claims growth of domestic express services from 16 origin cities in 58 destinations to 116 origin cities in 331 destinations in just two years time.

Company officials expect sluggish economic growth to continue and are taking measures to accommodate periods of lower demands for shipping by regulating the balance of capacity in the number of planes and services it offers during demand slowdowns. When asked about company projections President and CEO David J. Bonczek stated, “While economic environment is challenging, we remain confident that FedEx will improve earnings, improve margins and cash flow this fiscal year.” (September 22, 2011 conference call

A conference call from September 22, 2011, lists the company’s earnings during the first quarter of the fiscal year as $1.46 per share for a year over year increase of 22 percent. ( Revenue came in at 10.5 billion, an increase of 11 percent over 9.5 million  from last year’s, although the company’s estimated revenue due to recent increased operation was set at 10.34 billion. Operations increased 17 percent with 737 over 628 million the previous year. Its operating margin also improved 7 percent versus 6.6 percent from last year. Company shares are hovering around $81 dollars US and trading was down 9 percent for the day at the time this article was written. The company plans to release its Q2 FY12 Earnings on December 15, 2011.

Investors can purchase stock in FedEx through their Direct Purchase Plan which offers direct stock purchases and dividend reinvestment. Investments can be made through full-service brokers, discount brokers, and online brokers. Terms vary for individual listings. Potential investors would have to evaluate whether they feel this stock is fully valued based on future cash flow before investing.