FedEx Helps Lift Futures

Bob Pisani is off this week, this post was written by CNBC producer Robert Hum

Stocks are poised for a slightly higher open, and are seeking to rise for the 6th straight day. The S&P is up nearly 5 percent over the past 5 days, and if it closes up today, it will have its best 6-day winning streak in about 6.5 years.

Helping futures this morning: an earnings beat and stronger guidance from FedEx and encouraging data out of China.

Futures popped just as FedEx announced preliminary Q1 earnings of $0.58, topping its prior outlook of $0.30-$0.45, and above analyst estimates of $0.44. The strong results were helped by better-than-expected international package volumes.

The shipper also provided a solid Q2 earnings forecast of $0.65-$0.95, inline with current estimates of $0.70.

Shares of FedEx are up 4% in pre-market trading.

Over in Asia, China’s Shanghai Composite rose 2 percent after that country’s industrial output grew a higher-than-expected 12.3 percent in August. This was the fourth straight month of industrial expansion. Additionally, a separate report showed that bank lending also increased in August, calming recent fears of a potential slowdown in issuance of new loans.


1) National Semiconductor is down 2 percent despite beating Q1 estimates ($0.13 vs. $0.07 est.). Revenues fell 32 percent in the quarter, but that was a smaller-than-expected decline. CEO Brian Halla was still encouraged by current conditions, stating “demand was better than we expected.” This came as bookings rose 17 percent from the prior quarter on “higher order rates in North America, Europe, and Japan.”

Looking ahead, the chipmaker sees revenues 3 percent-8 percent, to $325 million-$340 million, ahead of the Street’s forecast of $315 million.

2) Mmm…mmm…good earnings. Campbell Soup Q4 results topped expectations ($0.30 vs. $0.26 est.), on improved gross margins as favorable effects of commodity hedging helped. The food maker also noted that higher prices helped offset a decline in volumes.

Looking ahead, Campbell Soup sees 2010 earnings between $2.33 and $2.38, ahead of analyst estimates of $2.31.

3) Morgan Stanley announced that co-President James Gorman will become the firm’s CEO on January 1. He will replace John Mack, who will remain the company’s Chairman. Mack, who has overseen a number of significant quarterly losses during his 4 year tenure at the firm, had stated he intended to give up his CEO position soon after he turns 65 this November.

4) Citigroup raises Goldman Sachs’ price target and Q3 & Q4 earnings estimates. Citing strong recent activity in the equity markets, reduced systemic risks, and an improved outlook for M&A, analysts at Citigroup boost Q3 earnings estimates to $4.00 from $3.20 and hike Q4 earnings estimates to $4.75 from $4.25. Price target on Goldman’s stock is also raised to $215 from $175, with the stock closing at $174.87 yesterday.

5) AIG is down 4 percent following a downgrade to “underperform” by Wells Fargo. While it closed at nearly $38 yesterday, Wells Fargo analyst John Hall cuts the stock’s price target to a range of $10-$20. He notes that the company would be “out of business” without government support and that the financial services firm has “virtually no tangible book value at the moment.”

6) Delta Air Lines is reportedly eyeing a minority stake in Japan Airlines. Japanese media reported the U.S. carrier would make an investment of several hundred million dollars in the large Asian airline, and would become Japan Airlines’ biggest shareholder.

7) Still caution ahead: speaking at an investor conference yesterday, RadioShack CEO Julian Day warned that the economic recovery “may be slower than people are hoping it will be.”



Questions? Comments?