Anyone leave purple for brown?
03-23-2024, 10:31 AM
#51
Clear ECAM
Joined APC: Oct 2014
Posts: 886
Originally Posted by tnkrdrvr
I figured this is closely related to the thread topic.
As I was sitting in my hotel room Thursday watching Bloomberg they ran a segment on FedEx’s earnings report. Obviously, the layoffs are important, but what stood out to me was the analyst who claimed that FedEx’s Express segment was barely breaking even. He claimed that their Ground business was doing high single digit profit margins, but the Express business was the weak link in their overall business model. I haven’t looked up the earnings report myself yet, but, if this is true, we (the overnight industry) may be in for a bit rougher ride.
As I was sitting in my hotel room Thursday watching Bloomberg they ran a segment on FedEx’s earnings report. Obviously, the layoffs are important, but what stood out to me was the analyst who claimed that FedEx’s Express segment was barely breaking even. He claimed that their Ground business was doing high single digit profit margins, but the Express business was the weak link in their overall business model. I haven’t looked up the earnings report myself yet, but, if this is true, we (the overnight industry) may be in for a bit rougher ride.
Raj made a point in his comments that Express was the main focus in business realignment and cost reduction.
FedEx Corporation is just fine as a whole, but there will be more tough days ahead for Express.
03-25-2024, 12:52 PM
#53
Line Holder
Joined APC: Dec 2016
Posts: 98
Originally Posted by ClncClarence
If you read the quarterly report it shows Express as the weakest company in terms of profit by quite a significant margin. This quarter had a 2.3% margin for Express compared to 10.8% and 16% for Ground and Express, respectively. Express generated over $10B in revenue and about $233M in profit.
Raj made a point in his comments that Express was the main focus in business realignment and cost reduction.
FedEx Corporation is just fine as a whole, but there will be more tough days ahead for Express.
Raj made a point in his comments that Express was the main focus in business realignment and cost reduction.
FedEx Corporation is just fine as a whole, but there will be more tough days ahead for Express.
Operating margin for UPS was 9.9%, and 11.2% adjusted for the 4Q2023
Opearting margin for FedEx was 5.7%, and 6.2% adjusted for 3Q2023
Interestingly enough, UPS operating margin went from 13% in 2022 to 10% in 2023.
And FedEx operating margins have increased from 4.7% to 5.7%.
With that said, you cannot pass judgement on FedEx Express, when there is no way to quantifiably compare the air network of UPS to the air network of FedEx. UPS air network could be worse, the same, or even better. The problem is, UPS does not breakout the profit margins of their air side because the entire company is under one network. Soon, FedEx will be the same way.
03-25-2024, 02:06 PM
#54
Gets Weekends Off
Joined APC: May 2013
Position: No Hats No Jackets No PAX
Posts: 1,504
Originally Posted by Cocoloco
FDX is giving up 6 767 new build slots. Question is will Atlas grab the slots before UPS? Need to-replace the 40 year old 757 PW's some day. Becoming the new B-52. Fly it for 50 years.
03-26-2024, 07:27 AM
#55
Occasional box hauler
Joined APC: Jan 2018
Posts: 1,683
Originally Posted by C17B74
Who knows, possibly scoop them up although Atlas's way forward is leaning towards more 777s. When opportunities arise businesses tend to lean forward so there may be some validity to it. Makes more sense for Brown to step in as you mentioned.
03-26-2024, 08:19 AM
#56
Gets Weekends Off
Joined APC: May 2006
Posts: 983
Originally Posted by tnkrdrvr
Although I think snapping up more factory new 76 freighters would be in UPS’ best interest, the company is in cost cutting mode and I doubt it will be willing to add that extra capital expenditure right now. Penny wise, pound foolish.
03-26-2024, 07:21 PM
#57
CHILLAX
Joined APC: Dec 2023
Posts: 37
Originally Posted by Cocoloco
FDX is giving up 6 767 new build slots. Question is will Atlas grab the slots before UPS? Need to-replace the 40 year old 757 PW's some day. Becoming the new B-52. Fly it for 50 years.
03-26-2024, 11:39 PM
#58
Gets Weekends Off
Joined APC: May 2013
Position: No Hats No Jackets No PAX
Posts: 1,504
Originally Posted by Cachaco
Giving up hard delivery slots and not exercising 7 options (which is what they announced) are two totally different things.
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