The quarterly profit projection is the expectation set by Wall Street to determine how a company is doing? good, bad or how is it executing its plan? If the company beats the expectations, the stock tends to go up; if the company does not beat expectations, the stock should go down; if the company execution of the business plan does not measure up, then the stock should go down. Given all the potential downs, senior management want to exceed expectations no matter what the economy is doing.

In an article from Reuters, FedEx after reporting higher quarterly profits, the shares went up. The street was happy to see a higher operating margin at Express, FedEx’s largest unit.

Parcels are a way of life for millions of Americans, which is why 171 million people belong to Amazon Prime which offers free shipping. At FedEx, the Express unit is seeing lower demand and to save costs it parked aircraft, reduced flight hours is trying to fly fewer jets.

In terms of buy back of stock, the Board has plans to buy $500 million in this quarter, part of a $5 billion share buyback program.

Analysts at JP Morgan Chase & Co., noted FedEx hits all the high notes this time with lower capex (capital expenditures). a reloaded buyback program and a beat in Express in view of low expectations.

CEO Raj Subramaniam said, weakness in global trade continues to constraint demand in the international business.

Linking to dividend paying stocks, the expectation is these companies will be steady as she goes companies continuing to make profits and pay dividends. Steady as she goes is a good strategy for these companies, because if it grows to fast, expectations of the next quarter will be less growth. Sometimes the emphasis is on growth, sometimes the emphasis is on little growth but good margins. For the bulk of your investments, the emphasis is meeting the expectations of the street.

There are more questions than answers, till the next time – to raising questions.