FedEx Turnaround Faces Mixed Earnings

about 1 month ago

Emily Rafo

"This is another turnaround story FedEx because their CEO is looking to turn around the business here and push FedEx ground and air freight networks together and slash costs. The latest earnings giving us maybe a mixed picture on how well that's going at least in the near-term. The stock is down about 2% right now, and it was down as much as 5.6% - the biggest intraday drop since June. They did upgrade their fuel targets but to a lower magnitude than the second quarter earnings beat, and then they raised the low end of the profit outlook. But the company also said they expect a $600 million hit to adjusted earnings due to higher costs from the grounding of some of their MD11s."

FedEx is undergoing a turnaround effort with initiatives to integrate its freight networks and slash costs, yet mixed earnings and a significant $600 million earnings hit from grounded MD11s suggest near-term caution.

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