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Durable goods are just that: hard goods; they don't wear out quickly and can be used over and over again for at least several years. Think your car, TV, refrigerator or computer. These are certainly not disposable, one-time use items.
The opposite of a hard good is (surprise!) a soft good or, if you like, a non-durable good. These are products you use once, like your lunch at McDonald's, the gas in your car and the ugly sweater your grandmother bought you for your birthday. These items have an intended lifespan short of three years, or are consumed immediately.
Investors pay attention to the monthly durable orders report released by the Commerce Department around the end of each month. When durable goods are strong, it means that U.S. manufacturing is humming along, though economists tend to parse the numbers pretty closely. Big-ticket items can skew the overall results, since an order for, say, 75 Boeing 747s has a bigger impact than 75 iPods. Luckily, the data lets economists break down the sectors.
Home / Markets / Industries / Transportation
Friday, May 09, 2008
Oil Prices Slam FedEx
FOXBusiness
Shipping company FedEx provided clear evidence of the negative impact of triple-digit oil prices when it slashed its fiscal fourth-quarter earnings forecast below Wall Street estimates late Friday.
Citing an estimated 7% jump in fuel costs during the current quarter, FedEx (FDX) said it now sees earnings in the range of $1.45 to $1.50 per share, compared to its earlier forecast of $1.60 to $1.80. Analysts polled by Thomson Reuters had been looking for a profit of $1.69 per share.
FedEx said its fuel costs have surged $100 million higher from its previous estimate as oil prices have soared in recent weeks. During May alone, crude prices jumped $11, including five consecutive record days this week. Crude closed at $125.96 a barrel in New York on Friday after briefly crossing over $126.
The shipping giant also said it's been hurt by "restrained demand" for shipping due to the "weak economy."
FedEx warned that things could get worse if the conditions deteriorate further.
"While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices. This revised outlook assumes no additional increases to the current fuel price environment and no further weakening of the economy," Alan B. Graf, Jr., FedEx executive vice president and chief financial officer, said in a statement.
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