FedEx Flies, Discover Dives — Thursday’s IP Market Recap

InvestorPlace Market RecapFedEx (NYSE:FDX) and Discover Financial Services (NYSE:DFS) both rolled out strong earnings reports Thursday — and that’s about where the similarities ended.

FedEx cruised to an 8%-plus gain Thursday after beating Wall Street expectations for fiscal second-quarter earnings per share, posting $1.57 against estimates of $1.52. FedEx’s performance far outshined last year, with net income up 76% to $497 million, and revenue up 10% to $10.59 billion.

FedEx CEO Frederick Smith attributed the quarterly boom to “effective yield management programs” as well as to improved demand for FedEx’s Home Delivery and SmartPost services as a huge holiday season for online shopping has boosted residential deliveries.

FedEx also announced an order for 27 new 767 aircraft from Boeing (NYSE:BA), which recently made its biggest deal in company history — a $19 billion, 208-plane contract with Southwest Airlines (NYSE:LUV) that eclipsed November’s boffo deals with Emirates airline and Indonesia’s Lion Air.

Discover put together quarterly earnings of 95 cents per share, beating analysts’ estimates of 89 cents per share and crushing the year-ago period’s 64 cents. The earnings beat was DFS’s fourth in a row, with numbers surpassing expectations by 27 cents, 37 cents and 31 cents in the past three quarters.

Unfortunately, investors yawned at the first non-double-digit beat of the year and hit the stock for a 3% loss. This also came despite Discover’s second dividend increase for the year — a 10-cent-per-share hike payable on Jan. 19, 2012.

A couple of Thursday’s biggest stock moves came from the tech and pharma sectors. Lam Research (NASDAQ:LRCX) extended a $3.3 billion stock offer for Novellus (NASDAQ:NVLS) — both sell front-end semiconductor manufacturing equipment. Novellus jumped 16%, and its counterpart gave up more than 8%. Also, Covidien (NYSE:COV) mimicked Abbott Labs (NYSE:ABT) by announcing a spin-off of its pharma business into another publicly traded company, which sent COV shares up about 3%.

Three Up

  • Sonosite (NASDAQ:SONO): Up 27.13% ($11.46) to $53.70.
  • WebMD (NASDAQ:WBMD): Up 9.07% ($3.14) to $37.75.
  • Delta Air Lines (NYSE:DAL): Up 5.4% (44 cents) to $8.59.

Three Down

  • InterMune (NASDAQ:ITMN): Down 30.34% ($5.55) to $12.74.
  • Deckers (NASDAQ:DECK): Down 9.55% ($9.13) to $86.46.
  • Green Mountain Coffee Roasters (NASDAQ:GMCR): Down 7.06% ($3.37) to $44.35.

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.

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