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FedEx sues US over its ban of some exports to China, will report earnings after the close: Morning Brief

Tuesday, June 25, 2019

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WHAT TO WATCH

After the bell, industrial heavyweight FedEx (FDX) and chipmaker Micron (MU) will release quarterly results.

FedEx is often looked to by investors as a reliable bellwether for global economic activity. In December 2018, FedEx issued weak guidance and warned investors that the company was seeing continued deceleration internationally. The industrial giant cut its guidance again in March. Investors and analysts will likely be paying close attention to what management says on the earnings call in regards to heightened trade tensions and how those issues are impacting FedEx’s business.

On Monday, FedEx sued the U.S. government, stating that it shouldn’t be held liable for shipped products that violated a Trump administration ban on exports to some Chinese companies. The suit followed reports that Huawei was re-examoning its relationship with FedEx after diverted shipments.

Analysts polled by Bloomberg expect FedEx to report adjusted earnings of $4.83 per share on $17.8 billion in revenue.

Meanwhile, Micron’s report comes on the heels of rival Broadcom’s (AVGOannouncement earlier this month warning investors that the U.S. ban on Chinese tech giant Huawei and the ongoing trade war will likely cut into its revenue by $2 billion. Analysts are predicting that demand weakness surrounding dynamic random-access memory (DRAM) chips and NAND memory chips will likely weigh on Micron. Micron is expected to report adjusted earnings of 78 cents per share on $4.68 billion in revenue, according to data compiled by Bloomberg.

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