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FedEx (FDX) late Monday raised its second-quarter earnings outlook based on increased demand for international shipping services and cost-cutting efforts. The delivery company upped its profit target to $1.10 per share from an earlier estimate of 65 cents to 95 cents per share. While the new forecast is far better than the original forecast, it still falls short of the $1.58 per share FDX earned in last year's second quarter. Still, it was far better than what the Street's expectation of earnings of 85 cents per share. The company's CFO Alan Graf noted, "FedEx will exceed previous earnings guidance in the second quarter primarily due to better-than-expected growth in FedEx International Priority and FedEx Ground volumes coupled with the benefits of our continuing cost control programs." In the international realm, Asia and Latin America were key drivers in boosting profit.
Technically, this past calendar year has been a good one for FDX. Since hitting a nadir in March, the shares have added more than 50% of their value and are currently trading in the higher $89 region. The news from late yesterday combined with potential support from its 10-month moving average should serve to push the stock through the $90 region.
Yes, the news from last night is the obvious catalyst; but a glance at the equity's chart doesn't show that the 10-month moving average is in a position of immediate support. I cited the 10-month moving average, as it is in the midst of a bullish cross of its 20-month counterpart. Such a move is called a bullish cross, and it is often considered a bullish indicator.
If this situation plays out, we could see the stock continue its advance. After the round-number $90 level, the $94 level is the next foreseeable layer of resistance.
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