Monday, December 8, 2008

FedEx, TXN Spoil the Market's Party

A string of several positive days for the equity markets has nudged all the bottom-callers out from under their desks to confidently proclaim yet another bottom.  Unfortunately, they have been smacked in the face this afternoon by the official start of pre-announcement season.  Both FedEx and Texas Instruments pre-announced worse-than-expected earnings.  While FedEx said it expected to meet second quarter earnings estimates,  the company sharply lowered guidance for fiscal 2009 from $4.75 to $5.25 share to $3.50 to $4.75 a share.  
Meanwhile, in Techland, Texas Instruments said it expects fourth quarter earnings of $0.10 to $0.16 per share, and revenue of $2.30 to $2.50 billion.  The chip maker's prior estimates called for earnings of $0.30 to $0.36 a share and revenues of $2.83 billion to $3.07 billion a share.  Shares in FedEx are down roughly 11%, while Texas shares are off 3% in after hours trading.  Can the market sustain yet another rally tomorrow in the face of such sobering news from two important companies?  If we get a government bailout of the auto industry tonight, maybe.  But I wouldn't hold my breath if I were you.

1 comment:

Anonymous said...

I hope you're right K10. Most of my positions are bearish and i've been taking a pretty big hammering lately. I can only feel the upmost sympathy for my bear brethren who might be on margin or some other tightrope. Will light ever shine on the bears again? I guess only time will tell...