While the calendar slows down dramatically heading into the last two weeks of 2022 there are a few earnings reports worth paying attention to next week: Federal Express (FDX), Nike (NKE) and Micron (MU).
Let’s start with FDX which reports the afternoon of Tuesday December 20. FDX got destroyed in mid-September when it preannounced a terrible quarter. Volumes in its Express division fell 11.4% from a year ago and CEO Raj Subramaniam went on Cramer’s Mad Money and answered affirmatively when Jim asked him if he thought we were going into a worldwide recession. This is long forgotten by now but FDX is an economic bellwether and it’s very much worth paying attention to what they have to say. I’d fade the rally we’ve seen in the stock over the last three months.
NKE is also reporting Tuesday afternoon. Like FDX, NKE got hammered last quarter when margins got squeezed resulting in a 15% decline in Earnings Before Interest and Taxes (EBIT). Lululemon (LULU) got smashed two weeks ago when it reported earnings and I’d be worried about NKE for the same reasons (see “LULU Is A Great Company But Now Is Not The Time”, Top Gun Financial, December 9).
The last earnings report I’d pay close attention to is chip maker Micron (MU) Wednesday afternoon December 21. Demand fell off a cliff a quarter ago as revenue rolled over to -20% and EPS -40% compared to a year ago. I’m fond of the saying “semiconductors are the new oil” as chips go into all the electronics contemporary life depends on. Therefore I’d pay close attention to what MU has to say as a window into the global economy as well.