{"id":64233,"date":"2023-09-22T13:32:10","date_gmt":"2023-09-22T17:32:10","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/fedex-cites-upside-from-ups-labor-negotiations-and-yellows-bankruptcy-but-postal-service-is-giving-it-a-run-for-its-money\/"},"modified":"2023-09-22T13:32:13","modified_gmt":"2023-09-22T17:32:13","slug":"fedex-cites-upside-from-ups-labor-negotiations-and-yellows-bankruptcy-but-postal-service-is-giving-it-a-run-for-its-money","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=64233","title":{"rendered":"FedEx cites \u2018upside\u2019 from UPS labor negotiations and Yellow\u2019s bankruptcy \u2014 but Postal Service is giving it a run for its money"},"content":{"rendered":"
\n

Shares of FedEx Corp. rallied after hours on Wednesday after the package deliverer raised its full-year profit outlook, as efforts to cut billions in costs \u2014 and disruptions at some of its main rivals \u2014 helped quarterly results despite continued weaker shipping demand that weighed on sales. <\/p>\n

Executives, during FedEx\u2019s
\n FDX,
\n -0.75%<\/bg-quote>
\n earnings call, said the company had gained \u201cupside\u201d from sometimes-tense negotiations between archrival United Parcel Service Inc. and the Teamsters union earlier this year and the bankruptcy filing of trucking company Yellow Corp. However, it said recent competition from the U.S. Postal Service weighed on the volume of items shipped. <\/p>\n

\n

U.S. freight pounds fell 27% during the quarter, the company said. That continued a trend seen in the prior quarter due to what FedEx called \u201cthe change in strategy\u201d by the USPS.<\/p>\n

The USPS in July launched a service called USPS Ground Advantage. The service, which it described as \u201ccompetitively priced for America\u2019s businesses and retail customers,\u201d offers two-to-five day shipping. <\/p>\n

Still, FedEx shares surged nearly 6% in after-hours trade. FedEx said it expects adjusted profit per share of $17.00 to $18.50 for its full fiscal year, up from a prior forecast of $16.50 to $18.50. However, executives said they expect \u201capproximately flat\u201d sales for its fiscal year, which ends in May, compared to earlier expectations for \u201cflat to low-single-digit-percent\u201d growth. <\/p>\n

The company reported first-quarter net income of $1.08 billion, or $4.23 a share, compared with $875 million, or $3.33 a share, in the same quarter last year. Revenue fell to $21.7 billion from $23.2 billion in the prior-year quarter.<\/p>\n

Adjusted for \u201cbusiness optimization\u201d costs, FedEx earned $4.55 a share. <\/p>\n

Analysts polled by FactSet expected FedEx to report adjusted earnings of $3.71 a share, on revenue of $21.74 billion. <\/p>\n

Chief Executive Raj Subramaniam, in FedEx\u2019s earnings release, called out an \u201coutstanding\u201d performance in FedEx\u2019s Ground business, which ships packages in the U.S. and Canada, and better profitability at its internationally-focused Express division, which offers fast air and ground deliveries. <\/p>\n

\u201cFirst-quarter results improved primarily due to the execution of the company\u2019s DRIVE program initiatives and continued focus on revenue quality,\u201d management said in the statement, referring to the name of their cost-cutting initiative. \u201cThe improvement in operating results was partially offset by ongoing demand weakness.\u201d<\/p>\n

FedEx reports as it\u00a0tries to scale back operations and cut billions in costs amid shakier demand, after inflation cut into consumer budgets and the delivery service\u2019s stock took a big hit last year. Even as demand lags, the company is raising prices \u2014 tacking on a demand surcharge for holiday-period shipments and raising general shipping rates by 5.9% starting in January. <\/p>\n

The results also follow labor tensions over the summer at UPS
\n UPS,
\n -1.02%<\/bg-quote>
\n \u2014 which reached a contract deal with its Teamsters drivers and logistics workers in July \u2014 and the Yellow\u2019s bankruptcy filing. <\/p>\n

Brie Carere, FedEx\u2019s chief customer officer, said in June that the threat of a strike at UPS had \u201copened a lot of doors.\u201d <\/p>\n

She added at the time: \u201cWe\u2019re having a lot of great conversations with legacy\u00a0UPS\u00a0customers and we feel really good about the sales pipeline because of the strong value proposition we have versus our primary competitor.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of FedEx Corp. rallied after hours on Wednesday after the package deliverer raised its full-year profit outlook, as efforts to cut billions in costs \u2014 and disruptions at some of its main rivals \u2014 helped quarterly results despite continued weaker shipping demand that weighed on sales. Executives, during FedEx\u2019s FDX, -0.75% earnings call, said […]<\/p>\n","protected":false},"author":1,"featured_media":64234,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-64233","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nFedEx cites \u2018upside\u2019 from UPS labor negotiations and Yellow\u2019s bankruptcy \u2014 but Postal Service is giving it a run for its money | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Shares of FedEx Corp. rallied after hours on Wednesday after the package deliverer raised its full-year profit outlook, as efforts to cut billions in\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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