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CNN —The threat of a strike at one competitor and the bankruptcy of another proved beneficial for FedEx this summer. Overall, adjusted earnings for FedEx’s fiscal first quarter were $4.55 a share, up from $3.44 a share this time last year. “As a result, we are well positioned as we prepare for the peak season.”The shipping company said its businesses saw a boost from UPS’s negotiations with the Teamsters Union and Yellow Corp.’s implosion during the quarter. For the company’s Ground division, which is its low-cost shipping service, the company reported that operating income grew 59%. FedEx gained customers from Yellow’s bankruptcyBut UPS’s contract negotiations were not the only external factor that helped boost FedEx this quarter.
Persons: Brie Carere, Raj Subramaniam, Carere, , ” Carere Organizations: CNN, FedEx, Teamsters Union and Yellow Corp, UPS, FedEx FedEx, Express, Teamsters Union, Yellow Corp, FedEx’s, UAW, Ford, General Motors, United Auto Workers Locations: Nashville
CFOs are stepping into a rapidly revolving door
  + stars: | 2023-08-14 | by ( Jennifer Saba | ) www.reuters.com   time to read: +3 min
NEW YORK, Aug 14 (Reuters Breakingviews) - Chief financial officers are stepping into an increasingly rapidly revolving door. loadingIn the first half of this year, 103 of the top 1,000 companies ranked by Fortune lost their CFO, according to executive search firm Heidrick & Struggles. CFOs are grappling with rising inflation and interest rates – in some cases, for the first time in their careers. High CFO turnover looks far from transitory. Follow @jennifersaba on TwitterCONTEXT NEWSTesla said on Aug. 7 that its Chief Financial Officer Zachary Kirkhorn was stepping down.
Persons: Elon Musk, Zachary Kirkhorn, Francois, Xavier Roger, Anna Manz, Fortune, Refinitiv, Ruth Porat, Morgan Stanley, Mike Cavanagh, NBCUniversal, Mike Lenz, Unilever’s, Graeme Pitkethly, Walt Disney’s, Christine McCarthy, James Kehoe, Crist Kolder, Tesla, Vaibhav Taneja, Kirkhorn, Peter Thal Larsen, Sharon Lam, Aditya Sriwatsav Organizations: Reuters, Finance, Walgreens Boots Alliance, London Stock Exchange, Reuters Graphics Reuters, Comcast, Walgreens, CFOs, Thomson Locations: Swiss
That’s why there is so much at stake in contract negotiations between UPS and the Teamsters union. Without a deal, 340,000 Teamsters are preparing to go on strike at the nation’s largest trucking company starting August 1. A UPS strike could spread disruptions like that across much of the country. Their ability to adjust and find alternatives, it’s going to be challenging.”The economy has changed radically in the 26 years since the last UPS strike in 1997. UPS won’t comment on its contingency plans, saying it is focused on reaching a deal that would avoid a strike.
Persons: , Patrick Anderson, It’s, , Sean O’Brien, O’Brien, it’s, Holly Wade, Satish Jindel, Mike Eisner, Jindel, Eisner, Tommy Storch, you’ll, it’ll, ” Storch Organizations: New, New York CNN, UPS isn’t, UPS, Teamsters, Anderson Economic Group, CNN, “ Shipping, National Federation of Independent Business, FedEx, US Postal Service, Postal Service, USPS Locations: New York, Michigan
FedEx’s changes are designed to simplify interactions with customers and accelerate cost-cutting efforts. FedEx Corp. is combining its Express and Ground delivery units into a single business, abandoning an operating structure championed by founder Fred Smith and criticized by investors and analysts. The changes are designed to simplify interactions with customers and accelerate cost-cutting efforts, FedEx Chief Executive Raj Subramaniam said. It helps the parcel-delivery giant adjust to a business model driven by e-commerce instead of one predominantly focused on business-to-business services, he said.
Transportation stocks were hit by FedEx’s plan to raise shipping rates amid lower volumes of goods moving globally. Shares of transportation companies are falling twice as fast as the hard-hit U.S. stock market, reflecting investors’ expectations that a recession is likely ahead. The Dow Jones Transportation Average, which tracks 20 large U.S. companies ranging from airlines to railroads to truckers, has declined 12% this month. The S&P 500 and the Dow Jones Industrial Average are down about half that much.
New York CNN Business —FedEx (FDX)will raise ground and express shipping rates by an average of 6.9% next year, the company said Thursday. Freight rates will increase by an average of 6.9% to 7.9%. Both mark an increase from FedEx’s rate hikes for this year. Last week, FedEx warned that a global recession could be coming, as demand for package deliveries around the world tumble. The weakening global economy, particularly in Asia and Europe, has hurt FedEx’s express delivery business.
Economic bellwether FedEx (FDX) stunned Wall Street last week with a massive earnings warning and tepid outlook for the global economy. Still, investors remain nervous about the health of the railroad business, a sign of the jitters about the overall economy. Most of Corporate America operates on a calendar year schedule for earnings, which means they will report third quarter results in October. That would be the worst quarter for earnings since a 5.7% decrease in the third quarter of 2020, when the economy was reeling from Covid-imposed lockdowns. That adds to the risk that a global spike in rates will lead to a further slowdown in earnings, consumer spending and the overall economy.
Dow drops 300 points as traders fret over FedEx warning
  + stars: | 2022-09-16 | by ( Jesse Pound | ) www.nbcnews.com   time to read: +1 min
Stocks fell Friday as Wall Street headed toward a big losing week, and traders absorbed an ugly earnings warning from FedEx about the global economy. The Dow Jones Industrial Average dropped 306 points, or 1%. That data sparked a decline of more than 1,200 points for the Dow. “There is a lot of nervousness about how the global economy can affect the U.S. economy now, while the U.S. economy is dealing with its own set of very serious issues. The Dow Jones Industrial Average has declined 4.7% this week, while the S&P 500 is 3.8% lower.
NEW YORK, Sept 16 (Reuters Breakingviews) - If only FedEx delivered profit as reliably as parcels. Boss Raj Subramaniam blamed macroeconomic trends, but the performance at United Parcel Service (UPS.N) suggests poor judgement made matters worse. FedEx raised wages amid Covid-19, when delivery people were putting in overtime to get toilet paper and hand sanitizer onto doorsteps. Founder Frederick Smith is presiding as executive chairman after Subramaniam ascended to be chief executive in June. FedEx plans to cut back flights, reduce working hours, defer hiring and close some of its office locations to save money.
New York CNN Business —FedEx warned that a global recession could be coming, as demand for packages around the world tumbles. What’s more, FedEx said it expects business conditions to further weaken in the current second quarter, which runs through November. While global revenue this quarter is likely to be flat compared to a year earlier, FedEx’s earnings are expected to plunge more than 40%. Additionally, the Dow Transportation Index fell 5%, while shares of FedEx rival UPS (UPS) closed about 5% lower. While it gave the sharply lowered guidance for the current quarter, FedEx said it was withdrawing its full-year guidance issued in June due to the “continued volatile operating environment.
We are particularly encouraged by this analysis, because investors out there may end-up wrongly interpreting FedEx (FDX)'s terrible guidance and economic outlook as a warning about Amazon's business. Analysts are now scrambling to assess whether the problems that FedEx described in its business and the global economy at-large will slow Amazon's e-commerce. Since there are many differences between FedEx and Amazon's business, we are sticking with our long-term thesis on Amazon. Bottom line We like UBS' work here as many on Wall Street clearly extrapolated FedEx's guidance to mean Amazon's e-commerce business is struggling — when, in actuality, it is not. If consumers roll back their discretionary spending, which Amazon's e-commerce business relies on, profits from AWS can help offset changes in consumer spending behavior.
Monday: AutoZoneQ4 2022 earnings release at 6:55 a.m. Wednesday: General Mills, Salesforce, Lennar, KB HomesGeneral MillsQ1 2023 earnings release at 7 a.m. ETProjected EPS: $4.86Projected revenue: $8.97 billionKB HomeQ3 2022 earnings release between 4:10 to 4:20 p.m. ETProjected EPS: $2.66Projected revenue: $1.88 billionCramer said he expects both Lennar and KB Home to be soft due to soaring mortgage rates. ETProjected EPS: $4.17Projected revenue: $70.8 billionCramer said he hopes the stock goes down so that the Investing Club can buy more.
CNBC's Jim Cramer advised investors not to panic after FedEx's worse-than-expected first quarter. Cramer outlined three reasons why investors shouldn't let the company's bad quarter scare them too much:This was CEO Raj Subramaniam's first quarter leading the company. "Maybe the bears who insist that the Fed raise and raise and raise and raise [interest rates] don't know what they're talking about," Cramer said. However, this doesn't mean that investors shouldn't brace themselves for more pain ahead, he said. "Most of us didn't know until tonight we had this many problems and that they are all getting much worse, not better."
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