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FedEx, Micron earnings — What you need to know in markets Tuesday

Heidi Chung

After the bell Tuesday, industrial heavyweight FedEx (FDX) and chipmaker Micron (MU) will release quarterly results.

FedEx is often looked to by investors as a reliable bellwether for global economic activity. In December of 2018, FedEx issued weak guidance and warned investors that the company was seeing continued deceleration internationally. The industrial giant cut its guidance again in March. Investors and analysts will likely be paying close attention to what management says on the earnings call in regards to heightened trade tensions and how those issues are impacting FedEx’s business.

In addition, after a longtime partnership, FedEx announced earlier this month that it would no longer be providing express U.S. shipping services for e-commerce giant Amazon (AMZN). Amazon has also been beefing up its in-house freight services. Though FedEx explained that Amazon was not a huge customer and only accounted for about 1.3% of total revenue in 2018, investors will be curious to see FedEx fares in the longterm following that divorce.

Analysts polled by Bloomberg expect FedEx to report adjusted earnings of $4.83 per share on $17.8 billion in revenue.

Micron’s report comes on the heels of rival Broadcom’s (AVGOannouncement earlier this month warning investors that the U.S. ban on Chinese tech giant Huawei and the ongoing trade war will likely cut into its revenue by $2 billion.

Analysts are predicting that demand weakness surrounding dynamic random-access memory (DRAM) chips and NAND memory chips will likely weigh on Micron.

“We are reducing estimates for [Micron] to account for worse-than-expected [average selling price] trends (particularly for Server DRAM) and a halt in shipments to Huawei, [Micron]'s largest customer,” Susquehanna analyst Mehdi Hosseini wrote in a note June 3. “We also expect [Micron] to have negative FCFs for a few quarters. The key question is whether [Micron] could keep [operating margin] above the break even point.”

Micron is expected to report adjusted earnings of 78 cents per share on $4.68 billion in revenue, according to data compiled by Bloomberg.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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