FedEx Corp. said net income dropped 75% in its fiscal third quarter, below even Wall Street's grim predictions for a company considered a bellwether of the national and global economy.
The shipping company also said it plans to cut $1 billion in expenses in the coming fiscal year, mostly from its Express unit, which generates nearly two-thirds of the company's overall revenue. Revenue at the Express unit was off 18% for the quarter ended Feb. 28. Overall, the company saw a 5% drop in its Express daily package volume for the quarter.
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The company said its cost-cutting plans will include job cuts, though it didn't provide specifics. It will also reduce network capacity at its express and freight segments, cut back work hours and expand its compensation reductions to non-U.S. workers, where allowed.
From a Dow theory perspective, this is terrible news.
2 comments:
I don't know it this means anything at all, but about 3PM this afternoon near my home on Long Island, I saw about a dozen UPS trucks all parked near each other outside a local Burger King. Their flashers were on and their engines were running, but the drivers were nowhere to be found.
Normally, I wouldn't have given this a second thought other than "well, that's unusual", but in these times I have to wonder what was going on.
The location is nowhere near a UPS hub, and I've never seen anything like it before.
Were they just out celebrating a comrade's birthday? At Burger King? A union-type meeting? Talking about insider scuttlebutt?
Regarding "reducing network capacity", you may be interested in knowing that FedEx is expanding its use of the US Postal Service as an intermediary, i.e. using the USPS network. They are given a deep discount for this service. In fact, the postal unions claim they are actually subsidized by the service due to the excessive discounts. For more info, see www.apwu.org
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