FedEx's Economic View Trumps Skewed Profit

FedEx reports fiscal third-quarter results Thursday morning, and what the package-delivery company says about the economy could be more important to Wall Street than news of the Memphis, Tenn., company's freight-hauling business. But beware: The economic measures could be temporarily juiced. FedEx clearly is having a rotten moment, as companies slash spending amid the global maelstrom. As such, analysts expect FedEx will post per-share profit of between 33 cents a share and 55 cents a share, well off the year-earlier $1.26 a share. But Wall Street is a forward-looking mechanism, and FedEx sees "the nuts and bolts of businesses around the world every day, while academic economists have to wait for data to pile up" before offering assessments, says Jim Corridore, a Standard & Poor's analyst. That means FedEx's real-time view, including data on package volume, weight and pricing, will say something about where the global world economy looks to be headed. But given DHL's retreat from the U.S. package-shipping market, "it's highly likely FedEx's measures will look better this quarter than they otherwise would have," says Gary Chase, an analyst at Barclays Capital. As a result, FedEx's economic signals this quarter "will be tougher to interpret," he says. —Jeff D. Opdyke