Investing General Discussion
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Jysin
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FedEx posting preliminary earnings and a big miss.
16:30 [FDX] Cuts Q1 $3.44 v $5.06e, Rev $23.2B v $23.7Be amid 'global volume softness that accelerated in the final weeks of the quarter'
-FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.
Further update: Withdraws FY earnings outlook, amid 'global volume softness that accelerated in the final weeks of the quarter'
16:30 [FDX] Cuts Q1 $3.44 v $5.06e, Rev $23.2B v $23.7Be amid 'global volume softness that accelerated in the final weeks of the quarter'
-FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.
Further update: Withdraws FY earnings outlook, amid 'global volume softness that accelerated in the final weeks of the quarter'
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Sanrith Descartes
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I have had them on my board to get back into after I flipped them a while back. Time to go back and deep dive their results.
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Jysin
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To get you started:
- Guides Q2 $2.75 or greater v $5.62e, Rev $23.5-24B v $24.8B
- Cuts FY23 capex $6.3B v 6.8B prior
- Affirms to repurchase $1.5B of FedEx common stock in fiscal 2023
- FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.
-While the company took immediate and decisive action to adjust its cost base, the impact of cost actions lagged volume declines, and operating expenses remained high relative to demand. Please see the tables below for preliminary results for each transportation segment.
-“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,” said Raj Subramaniam, FedEx Corporation president and chief executive officer. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”
Cost Initiatives
The company expects the benefits of cost actions to mitigate the effects of reduced demand throughout the remainder of fiscal 2023. These cost actions include:
-Reduction in flight frequencies and temporarily parking aircraft;
-Volume-related reductions in labor hours and other linehaul expenses;
-Consolidation of certain sort operations to drive productivity;
-Reduction of Sunday operations at a number of FedEx Ground locations;
-Cancellation of certain planned network capacity and other projects;
-Deferral of staff hiring;
-Closure of over 90 FedEx Office locations and identification of five corporate office facilities to be closed, with additional real estate rationalization planning under way.
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Will be interesting to see tomorrow, fedex very much a bell weather for retail and Ecom. It’s another major flag for a recession, as if we needed more. But at some point retail investors will capitulate. I suspect that isn’t until October when we start to get revised q3 guidance from more companies.
Sanrith Descartes
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Falstaff
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Sanrith Descartes
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Adding at a buck and change is a lot easier to stomach. Oh look, $115 for a hundo shares? Sure.
I got my cost basis under $3, so I just need one good earnings report and the inevitable short squeeze that will follow.
Sanrith Descartes
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SPY has support at $380, and a couple of spots floating down to the $360 range. Beyond that, its pretty quick ride down to $320-ish. All this being said, looking at the 5-year chart we are still in a good place. It just gets difficult to look backwards with a broad time view. Honestly, I'm not "worried" until we break down below $330 (the pre-covid high). I can see a tsunami of programmed selling kicking in there in enough volume to break through support at $320. But that is still quite a long way off.
Breaking $360 and failing to recover it quickly is probably the first "real" danger sign.
Breaking $360 and failing to recover it quickly is probably the first "real" danger sign.
Burns
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I was promised SPY 340 by a past Blazin post so I am diamond handsing cash until then!
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Mist
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This is silly. No one who puts their money in SPY or similar funds today is going to be unhappy about it 5 years from now.
If you're sitting on a bunch of money, buy $1000 every week.
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Burns
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Aldarion
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I appreciate this writeup. The points about who really owns most of the shares and would therefore benefit from rising share prices helped clarify something I was missing.Jysin answered originally but I will add on some more detail. I think you are mixing up how things work with publicly traded companies and that is leading to your confusion. I will spend a few minutes trying to make it more clear.
Shareholders own the company. Be it one share or 1 million shares. Yes ofttimes the company itself might own shares, quite often this tends to be a very small percentage of the total float (all shares outstanding). Most often, a high share price really helps the company when it wants to make an acquisition via shares as it makes their shares more valuable thus they need to give up less equity to purchase the other company.
The board of directors do not work for the company, they are selected by the owners (the major shareholders) to act as their agents (known and the principal and agent relationship) in watching the employees of the company to ensure the owners are getting maximum benefit from their stock ownership. It is this board who determines the compensation of the CEO (top employee). Depending on the company the board members may hold significant share positions or very few. In Twitter's case the board owns almost no shares except for Jack.
I explain the above to better explain the next part. As an investor, your buying or selling stock doesnt impact the company (in 99.9%) of situations. By you I mean us. When Elon Musk or Jim Cramer or Kathie announce stock moves they aren't impacting the company per se, but instead lots of other investors begin making moves to piggy back. Its this volume that moves prices as it tends to create an imbalance between buyers and sellers which can cause larger swings in price action (supply and demand). Nothing we as retailers do, Even Scrooge McDuck @Blazin , can move a share price even a cent.
Options: Options are nothing more than a contract to buy or sell a stock at an agreed upon price at an agreed upon date. You are correct that trading options doesn't initially involve taking actual ownership of the shares (for the most part). But its still putting you on the hook for the trade. Never ever make a trade for any single reason other than "I will make money on this trade". Imagine how shitty it would feel to trade an option on META or GOOGL and then find the trade goes the other way and you end up being assigned those shares. You would own something you despise and most likely at a financial loss as well.
Shorting: Shorting shares is selling shares you dont own but instead borrow. Again those of us on this board can have zero impact shorting a company. Shorting a company's stock not due to its financials but for emotional reasons is a good way to end up on the road to bankruptcy. We had a regular poster here who played the short game. He stopped posting here. Based on the trades he was making his losses playing short had to be exceedingly painful.
tldr: If you want to piss on a company, the market isnt the vehicle. Dont use their products/services, protest, piss on them via social media, use their competitors etc. At the end of the day, a company is just a financial instrument. The only people involved are employees, investors, vendors, supplies etc. I won't directly own cigarette companies because of my feelings about them. It is much more difficult with Beg Tech because of their size and inclusion in virtually every single index fund. You would have to avoid investing in big caps entirely.
Not to dispute any of the points you made - but I note that you close by saying you won't invest in cigarette companies directly which seems counter to the arguments in the rest of the post. Again, appreciate it, just noting that maybe we all have a line in the sand somewhere.
Sanrith Descartes
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Sanrith Descartes
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If you were to go back and read my posts over the years, I have slowly been worn down on my list of "I will never own" for non-financial reasons. Cigarette companies are the last on the list. And it gets hard even there. PM is always on my watch list because financially I like the company (for what it is, a cash cow). Truth is, I am an evolving human being (maybe devolving is more accurate) and occasionally my positions change.
Sanrith Descartes
Veteran of a thousand threadban wars
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Sanrith Descartes
Veteran of a thousand threadban wars
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