{"id":1948868,"date":"2023-06-16T07:20:02","date_gmt":"2023-06-16T11:20:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/will-cost-cuts-help-fedex-close-margin-gap-with-ups\/"},"modified":"2023-06-16T07:22:34","modified_gmt":"2023-06-16T11:22:34","slug":"will-cost-cuts-help-fedex-close-margin-gap-with-ups","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/will-cost-cuts-help-fedex-close-margin-gap-with-ups\/","title":{"rendered":"Can cost cuts narrow FedEx&#8217;s margin gap with UPS?"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwill-cost-cuts-help-fedex-close-margin-gap-with-ups%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1948868&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<h2>Profit Boost Expected for FedEx as Cost Cuts Take Effect<\/h2>\n<p>By Priyamvada C<\/p>\n<p>(Reuters) \u2013 FedEx may see a profit boost from cost cuts undertaken last year, although its investors will be keen on knowing whether those actions have helped it catch up with rival United Parcel Service on the margin front.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p>The global shipping downturn has been a drag on margins for most operators in the sector as the boom during the pandemic deflates, while high inflation and worries of a recession threaten consumer spending. <\/p>\n<p>To avoid a hit to its margins from an industry-wide slowdown, FedEx embarked on a cost-cutting drive in September by shuttering offices, cutting jobs, reducing its fleet of cargo planes and cancelling profit-sapping Sunday deliveries in far-flung areas.<\/p>\n<p>\u201cWe believe this (cost cuts) will narrow the margin and valuation disparity to UPS,\u201d Atlantic Equities analyst Oliver Holmes said, adding that FedEx\u2019s cost-cutting efforts will go a long way in helping the company improve its margins.  <\/p>\n<p>FedEx\u2019s operating expenses are expected to fall to $20.81 billion for the fourth quarter from $21.13 billion in the prior three-month period when it reports on Tuesday, according to Refinitiv data. UPS reported operating expenses of $20.38 billion in its latest quarter. <\/p>\n<p>On the margin front, however, FedEx has widely lagged UPS, making the Memphis, Tennessee-based company a target of activist investors.<\/p>\n<p>For their latest quarters, FedEx posted a net profit margin of 3.48%, while UPS reported 8.27%. The two companies have different fiscal years. <\/p>\n<p>To further shore up its margins following pressure from an investor, FedEx in April said it would consolidate its separate delivery companies into a single entity \u2013 a move some experts see as an opportunity to shrink labor costs.<\/p>\n<p>\u201cIt has the potential to further reduce headcount by about 2,000-3,000 jobs in the next two months,\u201d said industry consultant Satish Jindel, who helped found the contractor-based company that FedEx bought to compete with UPS on home delivery.<\/p>\n<p>Historically, FedEx\u2019s main rival has done a better job of keeping a lid on costs, despite having a more expensive unionized workforce. <\/p>\n<p>Expenses are not the only thing that FedEx is contending with, analysts say. They believe the delivery giant has more exposure to weakness in the \u201cexpress\u201d air shipment category than UPS, which is more dependent on the so-called ground shipments favored by online retailers and other shippers. <\/p>\n<p>\u201cThis dynamic has <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/will-cost-cuts-help-fedex-close-margin-gap-with-ups\/\" title=\"Can cost cuts narrow FedEx's margin gap with UPS?\">provided greater organic growth opportunities<\/a> for UPS as ground market growth has outpaced air,\u201d Holmes said. <\/p>\n<p>FedEx is expected to report a per-share profit for the fourth quarter of $4.89 on an adjusted basis, compared with $6.87 a year earlier, as per Refinitiv data. It is estimated to post a 6.9% fall in quarterly revenue to $22.72 billion.<\/p>\n<p>\u201c(FedEx\u2019s fiscal) Q4 trended slightly weaker overall for airfreight pricing and consumer demand,\u201d said Baird Equity Research analyst Garrett Holland, after lowering FedEx\u2019s profit estimate on softer demand through the quarter.<\/p>\n<\/p>\n<p> (Reporting by Priyamvada C in Bengaluru; Editing by Anil D\u2019Silva)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/uncategorized\/will-cost-cuts-help\/attachment\/fedex-stock-tanks-amid-recession-warning\/\"><\/a><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>with Jess Weber<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>A mention of the Big Guy clears out Joe Biden\u2019s press room.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>As more people are afraid to speak their minds, one <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pr-firm-ceo-on-how-to-fight-cancel-culture\/\" title=\"PR Firm CEO's advice on combating cancel culture:\n\nCombatting cancel culture: CEO's insights.\">public relations expert explains<\/a> how to avoid being cancelled.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>Investigators have yet to determine\u00a0an exact cause of the Surfside condo collapse back in June of 2021.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>HONG KONG (Reuters) \u2013 Chinese President Xi Jinping discussed the global rise of artificial intelligence (AI) with Bill Gates and said he\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>(Reuters) -Britain\u2019s competition regulator on Friday cleared Amazon.com Inc\u2019s planned $1.7 billion acquisition of iRobot Corp, maker of the Roomba vacuum cleaner.\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>BERLIN (Reuters) \u2013 Volkswagen\u2019s battery unit PowerCo will be ready for investors at the beginning of next year, battery chief Thomas Schmall\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<h3>Other News:<\/h3>\n<p>(Reuters) -Binance, the largest cryptocurrency exchange, said on Friday that it was leaving the Dutch market because it had been unable to\u2026 <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>FedEx&#8217;s cost-cutting measures from last year may lead to increased profits, but investors are eager to see if it has closed the margin gap with rival UPS. The shipping industry&#8217;s decline has negatively impacted margins for many companies.<\/p>\n","protected":false},"author":66,"featured_media":1948869,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[5975,3862,28811,17079,11150,11151,11344],"class_list":["post-1948868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-cost","tag-cuts","tag-fedexs","tag-gap","tag-margin","tag-narrow","tag-ups"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1948868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1948868"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1948868\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1948869"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1948868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1948868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1948868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}