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Bloomberg reporting the same.
FedEx results from last night - may be of interest to some, cut and paste from FreightWaves as I can’t access an article in MarketWatch about the results:-
FedEx Corp. posted fiscal 2023 second-quarter results late Tuesday that demonstrated its ability to quickly slash costs but also confirmed the damage a slowdown in demand is inflicting on its top line.
FedEx (NYSE: FDX) reported adjusted diluted earnings per share of $3.18, coming in above consensus estimates of $2.77. However, revenue came in about $900 million light at $22.8 billion and below the $23.5 billion revenue level in its fiscal 2022 second quarter.
Adjusted operating income came in at $1.21 billion, down from $1.68 billion in the year-earlier quarter. Operating margin fell markedly to 5.3% from 7.1%. Net income dropped to $815 million from $1.3 billion.
FedEx said it identified an additional $1 billion in cost savings following a September announcement that it would shave $2.7 billion in expenses in the current fiscal year. As a result, the company expects to cut $3.7 billion in costs for the fiscal year. It also said it would cut capital spending for the fiscal year by $400 million to $5.9 billion.
In early trading after markets closed, shares were up 3%. Shares traded down Tuesday by 2.62%. FedEx shares are down more than 33% over the past 12 months.
As expected, most of the revenue weakness came from FedEx Express, the company’s air and international unit. Operating income at the unit dropped 64% year over year (y/y) due to lower global volumes. Yield per-package rose 8% y/y.
FedEx telegraphed pronounced weakness in international airfreight activity, especially out of Asia, when it shocked investors and the transportation community in mid-September by pre-announcing substantially weaker-than-expected fiscal first-quarter results and withdrawing financial guidance for the rest of the fiscal year.
FedEx Express’ operating income plummeted to $186 million from $660 million in the fiscal 2022 first quarter. Company executives said at the time they don’t expect much of a rebound for the balance of the fiscal year.
In the second quarter, FedEx Ground, FedEx’s U.S. ground-delivery unit, posted a 24% year-on-year gain in operating income, primarily due to a 13% increase in package yields and cost-reduction actions. These factors were partially offset by increased purchased transportation rates, lower package volume and other higher operating expenses.
FedEx Freight, the company’s less-than-truckload unit, posted a 32% year-on-year gain in operating income due largely to an 18% increase in shipment yields. The gains were partially offset by wage increases and a decline in shipments.
FedEx Freight has temporarily furloughed an undetermined number of drivers until early March to bring capacity and costs in line with lower demand.
Putting aside the rights/wrongs of the current situation, these strikes must be causing very, very substantial financial and reputational damage to RM.
I have always used RM and dreaded using companies like M & S as they used to use Hermes (I think) but I have now switched to only buying online from companies who don’t use RM. I have 2 orders coming today from UPS (their online tracking system is excellent) and several from Amazon Prime, who have yet to let me down. On the other hand, I have 2 parcels yet to be delivered by RM (using 48hr track and trace) for which I have reference number but have been stuck ‘somewhere’ for 14 days. The companies I have bought from are in the process of giving me a refund which presumably they will then claim back from RM. How much will the compensation bill be at the end of this dispute?
It seems inevitable that a lot of commercial business will be lost by RM that will either never return or take some considerable time.
We live in a rural area and our ‘run’ seems to be split between our regular postie and his backup. There is no doubt it’s a physically demanding job (our postie is in his late 50’s or early 60’s) and he is driving a small van which looks barely roadworthy. By contrast Amazon Prime, DPD and UPS all seem to have brand new vehicles, suitable for parcels.
Putting the above aside, I suspect that any sympathy the general public have for the strikes will quickly dissipate in the next 12 days when Xmas post/parcels are not delivered.
The whole situation is simply an utter mess with no sign of resolution which will cause long term damage to the company and employees alike.
Of interest (cut and paste from MarketWatch) :-
Deutsche Post AG on Tuesday raised its full-year guidance after its operating profit jumped on year, as it weathered economic uncertainty while e-commerce trends gather pace.
The German logistics group DPW, +0.84%, which owns the international shipping company DHL, said it would raise its 2022 guidance for earnings before interest and taxes to around 8.4 billion euros ($8.42 billion), from EUR8.0 billion, plus or minus 5%, under previous guidance.
It came after EBIT for the year to the end of September rose to EUR6.5 billion from EUR5.9 billion in the same period of 2021, the Bonn-based company said.
Meanwhile, net profit in the third quarter was EUR1.23 billion, up from EUR1.09 billion, while revenue rose 20% to EUR24.04 billion, driven by its international B2B business.
Both figures beat expectations of EUR1.17 billion for net profit and revenue of EUR22.29 billion, according to analysts’ estimates provided by the company.
However, the company warned of global growth that is losing momentum and of a weakening macroeconomic environment.
“Looking ahead to the final quarter, Deutsche Post is well positioned despite continuing global economic uncertainties,” the company said.
Slightly off topic, albeit also slightly related, Amazon shares smashed after hours…
Oct 27 (Reuters) - Amazon.com Inc (AMZN.O) on Thursday forecast costs might eviscerate its profit for the current quarter, as early holiday marketing does little to boost sales growth and as labor and delivery expenses continue to swell.
Shares fell 19% in after-hours trade.
Part 2 :-
How Healthy Is easyJet's Balance Sheet?
We can see from the most recent balance sheet that easyJet had liabilities of UK£3.99b falling due within a year, and liabilities of UK£3.91b due beyond that. Offsetting these obligations, it had cash of UK£3.51b as well as receivables valued at UK£336.0m due within 12 months. So its liabilities total UK£4.05b more than the combination of its cash and short-term receivables.
The deficiency here weighs heavily on the UK£2.58b company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. So we'd watch its balance sheet closely, without a doubt. At the end of the day, easyJet would probably need a major re-capitalization if its creditors were to demand repayment. Given that easyJet has more cash than debt, we're pretty confident it can handle its debt, despite the fact that it has a lot of liabilities in total. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine easyJet's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Over 12 months, easyJet reported revenue of UK£2.7b, which is a gain of 213%, although it did not report any earnings before interest and tax. When it comes to revenue growth, that's like nailing the game winning 3-pointer!
So How Risky Is easyJet?
While easyJet lost money on an earnings before interest and tax (EBIT) level, it actually generated positive free cash flow UK£279m. So although it is loss-making, it doesn't seem to have too much near-term balance sheet risk, keeping in mind the net cash. One positive was the revenue growth of 213% over the last year. But the stock still looks risky to us. When I consider a company to be a bit risky, I think it is responsible to check out whether insiders have been reporting any share sales. Luckily, you can click here ito see our graphic depicting easyJet insider transactions.
Cut and paste from Simply Wall Street today - may be of some interest (part 1):-
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We note that easyJet plc (LON:EZJ) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.
What Risk Does Debt Bring?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.
View our latest analysis for easyJet
What Is easyJet's Net Debt?
The image below, which you can click on for greater detail, shows that easyJet had debt of UK£3.08b at the end of March 2022, a reduction from UK£3.32b over a year. But it also has UK£3.51b in cash to offset that, meaning it has UK£421.0m net cash.
Unable to cut and paste the reminder for some reason, just that was the bulk of the article.
May be of some interest? Cut and paste from MarketWatch (part 1)
FedEx Corp. on Thursday announced between $2.2 billion and $2.7 billion in cost savings for the fiscal year ahead, and said it would raise shipping rates for air and ground services by an average of 6.9% starting in January.
The plans followed preannounced quarterly results last week that stunned Wall Street and raised deeper anxieties about the company and the U.S. economy.
Those planned cuts, which added specific figures to cost-reduction plans announced last week, will largely come from FedEx’s internationally focused Express business. Management said $1.5 billion to $1.7 billion in savings would be drawn from that unit, with plans to lower flight frequencies and park jets.
Also read: Why FedEx’s profit warning is such bad news for the U.S. economy
Less would come from FedEx’s Ground unit, whose trucks haul packages to businesses and residences in the U.S. and Canada. The company said $350 million to $500 million in savings would come from that unit, including from closing some operations and halting Sunday operations.
FedEx said another $350 million to $500 million would come from putting off other projects, and closing some FedEx Office and corporate locations.
Avocet regarding compensation you said ‘ You are not entitled to any, even if they cancel the flight’. What else could you have possibly meant?
When you’re wrong it’s sometimes better to admit you’re wrong.
In any event, although Easyjet displayed appalling customer care when they cancelled our flight at very short notice and the subsequent chaos it caused us on our return home, they have redeemed themselves by speedily processing and paying us compensation and all of our expenses claimed.
Avocet, I don’t get involved in forum spats and have no intention of starting now, but you will see from my 2 messages below that Easyjet DO pay compensation when they cancel flights, unless it is extraordinarily circumstances. Staffing/crew issues are not deemed extraordinary.
From EasyJet’s Website…
1. Right to compensation
Has your flight been cancelled?
Has your flight been delayed so that you arrive at least 3 hours after the original scheduled arrival time?
Have you been denied boarding involuntarily?
If so, you may be entitled to the following compensation:
£220 / €250 for flights of 1500 km or less;
£350 / €400 for flights within Europe of more than 1500 km, and all other flights between 1500 and 3500 km;
£520 / €600 for all other flights of 3500km or more.
Please note that the compensation will be reduced by 50% if easyJet is able to offer you re-routing on an alternative flight to your final destination, provided that you arrive:
within 2 hours of your original flight arrival time, in respect of flights of 1500 km or less;
within 3 hours of your original flight arrival time for all flights between 1500 and 3500km provided you are flying in Europe; or
within 4 hours of your original flight arrival time for any other flights.
Please note that compensation is only payable where the cause of the delay or cancellation is for reasons other than extraordinary circumstances
Thanks Avocet, I must have been dreaming when I received and read this email…and the money deposited into my account must have also been some ‘dross’ dream….if so, I’ll keep dreaming…
Dear XXXX
Regulatory compensation case reference ID:
Date received: 02/09/2022
Thanks for submitting your claim.
We’re sorry your flight 67XX was cancelled due to crew issues. Although we make every effort to ensure you get to your destination on time, sometimes there are circumstances where we need to cancel or delay a flight.
We’ve had a look at your claim request and are pleased to tell you that you are eligible for compensation.
Now that your claim has been approved we will process a payment of GBP 1,400.00(350.00*4) to your bank account. Please allow upto 14 days for payment to arrive in your account as banks processing times can vary.
Once again, we’re sorry for the disruption to your flight and hope to welcome you on board again soon.
Kind regards,
Sufiyan
easyJet Customer Services
Avocet you said ‘ Compensation claims are minimal.
You are not entitled to any, even if they cancel the flight’
This is wholly incorrect and unsure why you think this?
EasyJet have just paid us £1400 for a recently cancelled flight (£350 per person for a family of 4). It is a legal requirement and the info is freely available on EasyJet’s website as to what compensation you are entitled to if they cancel a flight.
The above is excluding the ancillary costs EasyJet have had to fork out for the cancelled flight. They had to pay for us to fly to Barcelona with Vuelling (total costs £1200), 2xdouble rooms at a hotel near Barcelona airport ((£390), taxi fare €90 and then fly us back (using EasyJet) from Barcelona to the U.K. the following day. All in all the return trip has cost EasyJet £3500+
In fairness to Easyjet we received all monies owed and the compensation within 7 days of submitting the claims.
It will be interesting to see how the various cancelled/delayed flights over the summer will affect their bottom line.
Cut and paste from MarketWatch:-
‘ Shares of European delivery firms skidded Friday morning after a profit warning from FedEx FDX, -0.07%. Royal Mail RMG, -11.48% shares skidded 10% in London, while DHL owner Deutsche Post DPW, -6.97% stock slid 7% in Frankfurt. FedEx blamed "macroeconomic weakness" in Asia and "service challenges" in Europe for a $500 million revenue shortfall in these regions.’