FedEx projects a nearly $1.5 billion earnings boost from tax cut

Key Points
  • FedEx shares hit a record on Wednesday.
  • The company had projected an increase to annual EPS of $4.40 to $5.50.
  • Other companies rushed to announce employee bonuses and investments.
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FedEx said the Republican-backed tax bill would deliver it a windfall: nearly $1.5 billion in higher earnings next year.

The company's stock closed at a record high of $251.07 on Wednesday, after the bill, which would reduce the corporate tax rate, passed. After the market closed on Tuesday, the company had issued an sunny quarterly earnings report and outlook as package volumes surged.

FedEx raised its earnings expectations for the year, from $12.70 to $13.30 a share from a range of $11.05 to $11.85 a share earlier this year.

But the company said in its release on Tuesday evening, before the bill had passed, that the corporate tax cut could increase its fiscal earnings by $4.40 to $5.50 a share, because of a revaluation of its net deferred tax liabilities. It's a sum that would equal as much as $1.47 billion, based on the number of shares outstanding.

Other companies, such as AT&T rushed to cheer the tax bill, announcing bonuses for employees and other investments. The telecom giant said 200,000 employees would receive $1,000 bonuses. Boeing said it would spend $300 million on charitable and employee investments, including worker training and facilities.