FedEx (FDX) was another detractor for the quarter, falling 8%. FedEx reported weak third quarter numbers, which were significantly skewed by unusually severe weather and the company’s widely reported difficulties during the holiday season. Despite the issues with inclement weather, FedEx’s ground segment grew nicely; its volume and price grew 8% and 2%, respectively. However, in spite of this performance, the segment’s margins trailed last year’s, primarily because of hub/network expansion costs. In our view, this expansion will allow for rapid growth and share gains and is, therefore, worth the short-term costs. Finally, we believe FedEx remains focused on its shareholders and on returning capital via stock buybacks. During the most recent quarter, it repurchased approximately $2.7 billion of stock, and since its stock-repurchasing program began in October 2013, the company has repurchased 25 million — or 8% — of its outstanding shares. We expect further buybacks with 15 million shares left under the current authorization.
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