Investing.com -- FedEx surprised with strong earnings growth, while Nike warned of a revenue dip, resulting in differing stock performances. Apple faces a antitrust lawsuit, yet Wall Street looks set to end the week with strong gains.
1. FedEx soars on surprise earnings growth
FedEx (NYSE:FDX) shares soared premarket after the shipping giant reported better-than-expected fiscal 2024 third-quarter earnings even while citing uncertainty about the economy.
At 05:05 ET (09:05 GMT), FedEx shares surged 12% higher in premarket trade.
FedEx’s adjusted profit for the quarter rose to $966 million, or $3.86 per share, way ahead of expectations, while quarterly revenue came in at $21.7 billion, down from $22.2 billion last year.
The transportation company narrowed its fiscal 2024 profit forecast, raising the bottom end and lowering the top, adding it plans to buy back $500 million worth of its shares in the current quarter, with a new $5 billion share repurchase program in place.
There was good news from its struggling Express overnight delivery unit, as its operating margin rose 2.5% from 1.2% a year ago.
The unit, FedEx’s largest, had been struggling with falling volumes as its largest customer, the U.S. Postal Service, has tended to choose more economical ground services rather than the higher-margin air services.
FedEx added that it is currently in negotiations for a new multi-year contract agreement with the USPS, with the current contract expiring at the end of September.
That said, the company also expressed caution over the future, saying it expects revenue to be "pressured by volatile macroeconomic conditions negatively affecting customer demand for our services and constraining yield growth."
2. Futures higher, on track for strong weekly gains
U.S. stock futures edged higher Friday, heading for strong weekly gains, after the Federal Reserve stuck with a view for three rate cuts this year, even with a stronger economic outlook.
By 05:05 ET (09:05 GMT), the Dow futures contract was 35 points, or 0.1%, higher, S&P 500 futures had climbed by 8 points or 0.1%, and Nasdaq 100 futures had risen by 45 points or 0.3%.
The main indices all closed higher Thursday at new record closes. This was the fourth straight winning session, with the averages all on course for weekly gains of over 2%.
There is little in the way of economic data to change the tone Friday, and so a lot of attention may turn to the corporate sector.
FedEx, Nike and Apple are set to be in the spotlight, while Lululemon (NASDAQ:LULU) slumped premarket after the athletic apparel retailer posted weak guidance on the back of slowing growth in North America.
3. Apple faces DoJ antitrust case
The U.S. Department of Justice announced Thursday it was suing Apple (NASDAQ:AAPL) in a landmark antitrust case, with the iPhone maker becoming the latest of the Big Tech companies to be accused of operating monopolies and abusing their power.
The DoJ alleged that Apple the company has imposed software and hardware limitations on its iPhones and iPads to impede rivals from effectively competing.
“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” according to the suit.
The suit represents a significant risk to Apple’s business model–its stock fell more than 4% on Thursday–with the government having not ruled out breaking up one of the largest companies in the world.
Apple are not alone in drawing the ire of the U.S. government, with Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN) also facing lawsuits.
4. Nike warns of 2025 revenue dip
Nike (NYSE:NKE) shares traded sharply lower premarket, after the world's largest sportswear maker warned of a revenue dip in the first half of fiscal 2025 as it scales back on franchises to save costs.
At 05:05 ET, Nike shares fell 6.7% in premarket trade.
The company acknowledged that Nike's direct-to-consumer strategy was not driving growth as expected and that it was losing ground in the running category, with newer brands taking market share.
That said, the company’s third-quarter performance was better than expected, beating revenue and profit estimates on the back of holiday season discounts and new sneaker launches.
Nike reported a 3% jump in North America, its largest market, and a 5% rise in Greater China, allowing the retail giant to maintain its fiscal 2024 revenue forecast of a 1% growth.
5. Oil falls on Gaza ceasefire talk
Oil prices retreated Friday on reports of a possible Gaza ceasefire, which could ease geopolitical concerns in the Middle East.
By 05:05 ET, the U.S. crude futures traded 0.1% lower at $81.03 a barrel, while the Brent contract dropped 0.1% to $85.75 per barrel.
The two benchmarks fell following reports that the U.S. is set to table a United Nations draft resolution for an immediate ceasefire in Gaza, potentially as soon as today.
U.S. Secretary of State Antony Blinken said on Thursday he believed talks in Qatar could reach a Gaza ceasefire agreement between Israel and Hamas.
A ceasefire would represent a significant de-escalation in the Israel-Hamas conflict, and could potentially clear some uncertainty over supply disruptions in the region - particularly from Houthi attacks along shipping routes in the Red Sea.
Both contracts are set to end the week slightly lower, falling from four-month highs after rising more than 3% last week on the prospect of tighter global supplies and improving demand.