Stock Market Today: Why FedEx and Adobe Systems are Heading Higher
The Dow Jones Industrial Average is just over breakeven in pre-market trading, suggesting a flat start to the stock market today. Still, the afternoon might bring volatile trading courtesy of the Federal Reserve. The central bank is scheduled to publish its latest interest rate policy decision at 2 p.m. EDT, and will probably stay the course by continuing to cut its bond-buying program. But investors will also be focused on the Fed's new forecasts for unemployment, inflation, and economic growth, which could set the stage for a quicker boost in long-term interest rates.
Meanwhile, FedEx and Adobe Systems stocks are moving higher this morning after the companies delivered their quarterly numbers.
FedEx today beat Wall Street's expectations on both the top and bottom lines. The package delivery giant saw profit rise 15% to $2.46 a share in its fiscal fourth quarter. Sales improved by 4% to $11.8 billion. Analysts had expected earnings of $2.36 a share and revenue of $11.7 billion. FedEx saw solid gains in its ground shipment business, which it credited to growth in e-commerce. Key to that profit bounce was the fact that FedEx spent heavily on buying back its stock in the quarter. The company purchased 10 million shares over the last three months, which boosted earnings per share by $0.12. CEO Frederick Smith in a press release called the overall results "outstanding," and said that the company is "well positioned for a strong fiscal 2015." FedEx's outlook for the next year calls for earnings of roughly $8.75, a 30% improvement over this past year's $6.75. The stock was up 3.3% in pre-market trading.
Adobe's cloud services continue to give a big lift to earnings results in its second quarter. The software company last night posted quarterly sales of $1.1 billion, which was about even with last year but still ahead of expectations. Adobe's creative cloud business deserves much of the credit, as it grew subscriptions by almost 500,000 users from the previous quarter. The marketing cloud product also saw a healthy 23% bounce in sales. Those results helped the company book a stronger than expected profit: earnings were $0.17 a share, compared to last year's $0.15 haul. CEO Shantanu Narayen suggested that those results are just the start, saying in a press release that management expects "a strong second half of the year." Adobe's stock was up 8% in pre-market trading.
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The article Stock Market Today: Why FedEx and Adobe Systems are Heading Higher originally appeared on Fool.com.Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Adobe Systems and FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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