Posts filed under “Valuation”

Shipping to Lattes: The Problem of Higher Prices

Earlier this morning, we noted Starbucks’ (SBUX) inflation woes.

When I wrote "Expect to see more problems like these," I didn’t mean within an hour or two: FedEx (FDX) dropped the bomb that slowing growth and higher energy costs put the squeeze on profits and future revenue expectations:

FedEx Corp. lowered its earnings outlook, citing high fuel costs and weakness in its less-than-truckload freight business.

The Memphis, Tenn., based shipping company cut its fiscal second-quarter earnings estimate to $1.45 to $1.55 a share from $1.60 to $1.75 and dropped its its full-year earnings estimate to $6.40 to $6.70 a share from previous guidance of $6.70 to $7.10.

FedEx said the cuts were due in part to an 8% increase in fuel costs to $85 million and weaker shipping volumes. Less-than-truckload carriers combine freight from multiple customers in their trailers.

"While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices," said Alan B. Graf, Jr., FedEx executive vice president and chief financial officer.

So let’s make a list: What other firms are in danger of seeing sales and profits falter due to high input prices — be they food, energy, labor or other crucial components?

Use comments below to add to the list . . .

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Source:
Fedex Cuts Earnings Outlook
DOW JONES NEWSWIRES
November 16, 2007 9:34 a.m.

http://online.wsj.com/article/SB119522218219395678.html

Category: Consumer Spending, Earnings, Economy, Valuation

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Category: Corporate Management, Earnings, Valuation

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Category: Corporate Management, Credit, Derivatives, Earnings, Psychology, Real Estate, Valuation

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Category: Corporate Management, Economy, Financial Press, Markets, Valuation

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Category: Commodities, Contrary Indicators, Energy, Valuation

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Category: Corporate Management, Derivatives, Financial Press, M&A, Valuation

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Category: Investing, Markets, Valuation

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Category: Financial Press, Investing, Media, Psychology, Technical Analysis, Trading, Valuation