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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Business

Business

FedEx rises on profit outlook amid e-commerce parcel demand pressure.

FedEx Logo: Stefan Falke
FedEx Logo: Stefan Falke FedEx Logo: Stefan Falke
FedEx Logo: Stefan Falke
FedEx Logo: Stefan Falke FedEx Logo: Stefan Falke

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Aggressive cost cuts helped FedEx Corp. (FDX.N) raise its profit projection amid dropping e-commerce package volumes; its shares soared as much as 11% in early trade on Friday.

Bloated operations have hurt FedEx’s previous results, frustrating investors and raising concerns about its performance compared to rival United Parcel Service Corp. (UPS.N).

Stock Street rose Thursday after FedEx reported progress on its plan to save $3.7 billion by slashing employees and storing planes.

“Management has been able to slash costs quicker than projected which offsets worries of decelerating pricing support,” said J.P. Morgan analysts, raising their FedEx stock price objective by $34 to $233.

FedEx cautioned that package volumes would stay under pressure in the coming months, clouding the outlook for e-commerce and freight industries already struggling with high prices and the recent financial crisis.

J.P. Morgan analysts noted FedEx’s delivery volumes are simply stabilizing on softer comps and not resuming activity.

Walmart Inc (WMT.N) reported 17% e-commerce growth in its current quarter, much behind the peak pandemic level of almost 70% growth, while Amazon.com Inc (AMZN.O) stated last month economic uncertainty was dragging on shoppers.

Several trucking businesses are optimistic that freight volumes will rise in the year’s second half. Still, some experts worry that poor macroeconomic data would delay that.

“While freight clients still expect a 2H pick-up, they are not scheduling additional capacity… We expect confidence to diminish as timeframes expand, although acceleration may still occur “Allison Poliniak-Cusic, Wells Fargo analyst.


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