Shares of FedEx, UPS, Deutsche Post and TNT all dropped yesterday after FedEx released Q1results that disappointed expectations and as international stock markets retrenched after a strong
rally in early September.FedEx slumped 3.75% to close at $82.72 and leading competitor UPS was 1.39% lower at $66.72.European rivals Deutsche Post DHL and TNT also fell back, with DP DHL down 1.78% to €13.22 and TNT0.26% lower at €19.54.
FedEx doubled operating and net profits in its June – August 2010 first quarter but analysts hadestimated an even stronger improvement in the company’s results. Its Q2 earnings forecast is lowerthan analysts had previously estimated, although it raised both the Q2 and full-year forecasts.Comments by company officials that economic growth could slow in the coming months also putpressure on the share. Analysts pointed to the relatively low US domestic express volume growth of3% compared to the 19% rise in international express volumes.
Shares of peers UPS, Deutsche Post DHL and TNT were impacted by the FedEx results, although TNTwas also under pressure due to uncertainty about its mail business. Integrator shares had generallyperformed well in the first half of September due to general increases in stock prices and againstthe background of a continuing recovery in international trade, driving up their expressvolumes.
During the first half of September, FedEx had seen its share price rise fairly steadily from$78.05 on 31 August to $85.94 on September 15. Similarly, UPS shares, which closed at $63.80 on 31August, rose strongly in the two weeks of this month towards the $68 level.
Following the trend, the Deutsche Post DHL stock price had improved from €12.91 on 31 August tothe €13.50 level over the last fortnight. The TNT share price, which had fallen strongly by 12.53%last month to €20.03 on 31 August, also performed better in the first half of September. It hadrisen to more than €20.50 before dropping back in the last two days.
