FedEx Corporation (NYSE:FDX) recently reported its second fiscal quarter’s financial reports. The company saw a huge increase in its net income and revenues. Total revenues spiked up by 5 percent and reached to a total of $11.9 billion whereas the net income rose by 23 percent and flew to $616 million from a previous figure of $500 million. As far as the diluted earnings of FedEx Corporation (NYSE:FDX) are concerned, the figures rose from $1.57 for each share to $2.14 for each share in a matter of one year.

The management of the company reassured an earnings guidance of around $8.50 to $9 for each year for the year 2014. However, the company’s stocks came down by 3.75 percent on December 17, 2014, for the investors were expecting even stronger figures for the second quarter due to the dropping prices of fuel and the improvements in economy. Was this decline in the stocks of FedEx Corporation (NYSE:FDX) justified? Let’s have a look at some of the metrics and investors’ expectations.

The company promised its investors that it would bring the income margins of operations in double digits in the coming months. It seems like FedEx Corporation (NYSE:FDX) is quite close in achieving this goal. The company posted an income margin of 8.5 percent in the recent quarter.  The company had been reporting a margin of around 6.5 percent for the last 5 years. Last year, it improved the figures to 7.6 percent, and now the numbers have reached 8.5 percent. Market analysts are quite optimistic about the income margin of the company.

These increases may seem insignificant, but in reality, the profit will increase many folds when the margins will be translated into profits. For instance, if the revenues of the company reached $47 billion and it sees an increase of 2 percent in the income margins, the extra profits that the company will make will be around $1 billion.
One reason why the investors might have pulled back from FedEx Corporation’s (NYSE:FDX) stock is the fuel cost’s impact on the profitability of the company. In the earnings call of FedEx Corporation (NYSE:FDX), the analysts and experts were surprised to hear that the company had recorded a minimal boost from the lowered fuel prices.

Alan Graf, the chief financial officer of FedEx Corporation (NYSE:FDX), explained that the edge the company gained from the lowered fuel prices was partially balanced out by the reduction in the surcharges of customers’ fuel bills. The logic is that the company passes an extra cost to its clients when the prices of oil rise, and so, it had to remove the surcharges from customers’ invoices when the fuel prices came down.

Coming to the stocks prices of FedEx Corporation (NYSE:FDX), the company, on the last trading day of December 18, 2014, started its stocks at a price of $170.95 and closed at a price of $174.38, after hitting the highest price of $174.38. The figures looked quite promising, especially after the decline that they had seen the previous day.

FedEx Corp. (NASDAQ:FDX), a renowned package delivery provider, forecast the number of shipments that they will receive in the holiday season, on Wednesday. The company estimated that this year, they will receive a record-breaking 22.6 million shipments on 15 December, which is the peak day of the season. The day after the Thanksgiving holiday in America marks the start of the shopping season for Christmas. FedEx Corp. (NASDAQ:FDX) have estimated that they will be shipping at least 290 million packages from Black Friday to the beginning of the holiday season.

The company’s annual peak has increased by 50% compared to the peak value in 2007. On 17^th December, 2007, the company had shipped 11.5 million parcels. This can be due to the advancement in e-commerce and online shopping. A fiasco occurred in the holiday season last year when 2 million packages did not find homes on Christmas Eve. This problem arose because a surge occurred unexpectedly in the later days of the holiday season. United Parcel Service (NASDAQ:UPS) took a greater impact from this incident than FedEx Corp. (NASDAQ:FDX) did.

The vice president of integrated communications and marketing at FedEx Corp. (NASDAQ:FDX) expressed his pride over the performance of the company in the last year despite the challenging weather conditions. FedEx Corp. (NASDAQ:FDX) collaborates with its retail partners to determine what they would need in the holiday season and prepares for the coming challenges.

The capital investments of FedEx Corp. (NASDAQ:FDX) are $1.2 billion this year. The company will be spending 90% of these investments in increasing their capacity in preparations for the peak days of the holiday season. FedEx Corp. (NASDAQ:FDX) and several other shipment companies are now working hard so as to deal with the millions of seasonal shipments effectively and efficiently, and avoid any problems of stranded packages. FedEx Corp. (NASDAQ:FDX) hired 40,000 seasonal workers in the last year. This year, however, the company has increased the number to 50,000.

United Parcel Service (NASDAQ:UPS) did not provide their estimate for the number of shipments that they will receive during the peak days in this year. Typically, the company gives its forecasts after it reports its earnings for the third quarter of the year. The company is due to post its earnings on 24^th October. United Parcel Service (NASDAQ:UPS) have also proclaimed their plans of hiring 95,000 seasonal workers especially to deal with the holiday packages. Last year, the company had hired 55,000 for this purpose. None of the shipping companies want a repetition of the events of last year, and so, are taking measured precautions to face the challenges brought by the holiday season shipments. This shows their commitment to delivering quality services and good performance.

The start of the week seemed like a disappointment through analysts’ views with the medical imaging provider- Analogic (NASDAQ:AATI) – down in the dumps, reporting its quarterly results. They predict a fall in both EPS and revenue by 19 percent and 10 percent respectively. However, this could have been worse.

The company has been seen to go below the targets of Wall Street in the past three quarters. This negative image may not be what the company needs at the moment. This is one explanation why Analogic is seen to be trading nearer to the company’s 52-week low compared to its 52 week high. Time to pull your socks up and take serious measures!

Once again Adobe (NASDAQ:ADBE) takes the lead with its desktop publishing. Prevailing as industry standards, Photoshop and Acrobat are still market leaders however their growth seems to be decreasing as the public tide is shifting towards less expensive cloud-based solutions. The renowned brand however is still predicted to go over and above revenue of about $1 billion this Tuesday.

The state of the economy is eye catching with FedEx (NYSE:FDX) kick starting this Wednesday. Its quarterly reports will make you wonder how well companies and individuals are doing with a reduced document delivery time and enhanced online sales. Analysts have started to predict the growth of FedEx (NYSE:FDX) with revenue up 4 percent the current quarter and 5 percent the fiscal year.
With seven successive quarterly profits Rite Aid (NYSE:RAD) really pulled through. People wouldn’t be surprised if this hadn’t been the case given five years ago, the company was on the verge of bankruptcy. Its stock dropped to 20 cents thus investors who had been keen then are reaping benefits now. The drugstore once covered in a sea of losses in 2009, now finds its chance to report another profit this Thursday. Analysts are sure of it happening as all eyes are on this Thursday’s quarterly reports.
The tech giant revealed its new iPhone 6 and 6 Plus a few days ago with all the hype regarding the new features and bigger screens with better pixels. This Friday, Apple(NASDAQ:AAPL)  is said to launch them into the market with customers that have pre-ordered on the company’s site benefiting than those who will have to wait in line for hours after 8 a.m.

Apple (NASDAQ:AAPL) aims to become a crowd pleaser with its larger displays and improved camera not to mention the 7mm thin easy-to-slide-in-your-pocket model for those on the run in day to day work. The brand’s loyal customer pool has once again undoubtedly responded to the company’s call with open arms; however it will be interesting to see how the well will the company do in attracting new customers.

This is revealed just when the USPS is experiencing tension with its two major rivals Fed Ex (NYSE:FDX) as well as UPS (NYSE:UPS). The delivery charges by the USPS are being decreased just when the rates at the private companies are expected to increase. Due to this decrease in charges it is obvious that the Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) are afraid of losing customers to USPS. The e-commerce providers were annoyed last December, when a lot of customers received their parcels after Christmas due to the misjudgement on the part of Fed Ex (NYSE:FDX) and UPS (NYSE:UPS). Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) were unable to comprehend the volume of the packages correctly which caused the delay. All of this resulted in the increasing tension between the rival companies because of the competition.

Fed Ex (NYSE:FDX) and UPS (NYSE:UPS) argue that the delivery service owned by the government has undue benefit because it has a monopoly on delivering of the letters. This argument holds true if you look at the background of the company which has kept the USPS going. USPS has the advantage over Fed Ex (NYSE:FDX) and UPS (NYSE:UPS); however, lately the first-class mail has lost popularity amongst users because of the use of e-mail. Not many people use the old method of sending letters anymore. The monopoly of the USPS means going from door to door six days a week to find out if people have pending letters that need to be picked up. This is a universal service demand.

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The ongoing competition and the tension between the companies is not something that can be over looked. The solution to the rift between the USPS and the private shipment companies is, that the Congress should allow the USPS to hand over the monopoly, and let the companies and couriers contest for this declining business, just as it was done by the European posts. This will ensure that the USPS will compete more effectively with its rivals, and thus help averting a financial crash.

USPS will therefore become more favorable to the private investors who are as of now more inclined towards European posts. The USPS will then be able to develop its old fleet of trucks with the flowing money and modernize their vehicles. However, whether the private couriers will agree to it or not, is the question? It is yet to be seen whether the private courier’s interest is personal or not.

These charges were filed in the San Francisco district court. They accused FedEx of knowingly accepting payments from certain pharmacies that used invalid prescriptions to order prescription drugs to be delivered to them. It also claims that the company collected payments for some of these prescriptions to give back to the issuer.

Patrick Fitzgerald, the senior vice president of marketing and communications for FedEx, explained that FedEx requires customers to pay for the company’s services. He states that the company policy to collect on delivery service, which means that the company receives a payment to send back to the original shipper, is available to every FedEx customer. Thus, he insists that FedEx is innocent of these charges and will plead not guilty in the court hearing.

This lawsuit is a test to determine how much legal responsibility delivery companies take for the contents of the packages that are delivered using their services. The company stated that it delivers over 10 million packages each day, and that it is impossible to inspect and police every single one.

The lawsuit states that these illicit activities began in 2004, when FedEx began to repeatedly ignore government warnings that it was violating the law by shipping drugs that were ordered from pharmacies online, where all a consumer had to do was fill out a questionnaire online.

Some of the deliveries from these pharmaceutical websites were delivered to parking lots and vacant homes. The most recent addition to the suit states that the senior manager for FedEx announced that many online pharmaceutical sites have been shut down by the federal government as a result of fraud and illicit sales of controlled pharmaceutical drugs. Recently, there was a case of a teenager dying after being supplied with controlled prescription drug that was delivered by FedEx. This incident was announced in an internal memo by the senior manager.

According to Fitzgerald, many shipping companies, including FedEx, ships many goods that, if misused, can be harmful.

While FedEx is working with the authorities to try to find a solution to this problem. However, the company states that it is the responsibility of licensing authorities and law enforcement to monitor and regulate the actions of doctors and pharmacists.

FedEx has made efforts to obtain a list of illegal pharmacies on the web so it can stop providing their service to them.

A spokesperson for the United States attorney’s office of the Northern District of California has refused to comment.

The first lawsuit against FedEx was filed in July, and accused the company with conspiracy to distribute prescription substances, misbranded drugs. FedEx pleaded not guilty in the court case last month.

If the company is found guilty in the San Francisco court, it could be charged with a fine of up to twice its revenues from the business, or roughly $1.6 billion.

FedEx has already disputed that amount. The company has issued a statement claiming that FedEx’s revenue from the shipments from the pharmacies in question were much less than $820 million.