Bookmark and Share

FedEx Aims to Boost Profit (FDX)

Package delivery company, FedEx Corporation (NYSE: FDX)shares gained 5.15% on Wednesday after the company revealed that its ongoing restructuring efforts will shrink costs and bolster profit by $1.7 billion in next three years.

Reeling under pressure due to falling volume in overnight shipment units due to slowing global economic, the company with an aim to reposition itself is focusing more on cheaper delivery options.

Without divulging too many details, FedEx’s Chief Executive, Fred Smith while addressing investors and analysts said that “significant benefits” arising out of current cost cutting measures will be visible by 2015. Details regarding savings and efficiency gains will be discussed in a public meeting on Thursday, October 11, starting 9 a.m. Eastern. Earlier in September the company had said that most cost reductions will be coming from the FedEx Express unit and FedEx services division.

Meanwhile the company has downwardly revised its outlook on global economic growth for fiscal 2013. FedEx said that recession in some euro zone economies, significant slowdown in China and higher energy prices will curtail the global economic growth.

Commenting over revised forecasts, FedEx’s Chief Executive of the Express unit said to analysts and Investors, “”We are operating in the most tepid post-recession recovery in the modern era.”

FDX said it now anticipates global gross domestic product will increase by 2.6 percent in 2013, which is 0.1% lower than FedEx’s earlier forecast in September.

The forecast for 2013 is slightly better from FedEx’s outlook for 2.3 percent growth in 2012.

The U.S. economy is expected to grow by 1.9% in 2013, while in 2012, FedEx now expects growth of 2.1%, down 0.1% from its earlier prediction, made last month.

According to FedEx, Asia will continue to outpace other economies in 2013. However, the company sounded positive on the U.S. economy.  The company said that improving housing market, higher auto sales and stable financial markets augur well for the U.S. economy; nevertheless, post election policies , higher energy prices and potential threat from “fiscal cliff” which will automatically lead to massive spending cuts might weigh on the economy.

FedEx results are often considered as economic bellwether since it transports broad range of good from various industries.



Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

All stories in are for informational purposes only. This is NOT a stock recommendation. This story is a daily light analysis featuring a stock with insider buying. With some caveats, insiders purchase a stock because they think the stock is going up. There are other factors to consider such as size of the transaction relative to their compensation and net worth. Sometimes, insiders might be propping a stock price up for future financing. Sometimes, the amount of insider buying are misread or misreported. Each month, DailyStocks releases a a summary of the stocks with insider buying. Sign up for the free monthly newsletter at . About is the place where you can find stories about stocks with insider buying, where you can educate yourself about stock market investing, and where you can perform the stock search engine analysis – you enter a stock symbol, and you get a resulting page of stock ticker indexed links so that you do not have to type the stock symbol each time.