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ore bad news for FedEx after dissappointing earnings last week, Sunday, Amazon announced third-party sellers could not use $FDX's Ground and Home shipping for Prime services. FedEx wounded by slow European economy and the trade war took a hit

fedex holiday

The trade war has hurt $FDX more than most with it's large China presence. Europe's doldrums haven't helped its TNT Express business either. Rivals include $AMZN, $UPS and DHL

FedEx had been a star of the the bull market - and then came the Trade War.

The latest move from Amazon comes after FedEx dropped Amazon twice this year. In June FedEx Express cut its US business with Amazon. Then in August FedEx Ground also cut its ties with Amazon.

The move follows the dissappointing earnings announced on Thursday.  Deutsche Bank's Amit Mehrotra in a note called the earnings "breathtakingly bad.". On Thursday the stock fell over 12%, even more striking when you consider we are the throes of a manic buy anything bull market. 

To pull the plug a few days before Christmas Amazon played the dirty divorce card on FedEx right before Christmas, lets see how FedEx moves on from here.

Amazon’s move into its very own delivery capabilities has continued to threaten FedEx stock. Earlier this week, Amazon's third-party sellers make up 58% of its total merchandise sales were told they they will temporarily be restricted from using FedEx’s ground and home delivery for Prime orders prior to FedEx earning. The latest news puts a dot at the end of that statement.

 

FedEx Corporation NYSE: FDX Reported Earnings After Close Thursday

$2.51 Missed $2.76 EPS With $17.30B Missing $17.58 billion Forecast in Revenue

Earnings

FedEx (FDX) reported Q2 earnings that missed an they cut guidance on December 17, 2019,  FDX) reported lower revenues and earnings for the second quarter of 2020 amid continuing weakness in its core business. The results missed analysts’ forecast and the stock dropped sharply during Tuesday’s extended trading session. The company also lowered its full-year earnings guidance.

Adjusted earnings, excluding one-off items, dropped to $2.51 per share from $4.03 per share last year and came in below the consensus estimate. Net income was $560 million or $2.13 per share, down from last year’s profit of $935 million or $3.51 per share.

Revenue had a 3% fall in the second-quarter to $17.3 billion, which also missed Wall Street’s projection. Adjusted earnings per share $2.76 expected and revenue $17.58 billion expected.

“Fiscal 2020 is a year of continued significant challenges and changes for FedEx, particularly in the quarter just ended due to the compressed shipping season. We have significantly enhanced our e-commerce capabilities with strategic initiatives including year-round seven-day FedEx Ground delivery, enhanced large package capabilities and the insourcing of FedEx SmartPost packages,” said CEO Frederick Smith.

FedEx Crop. 2Q 2020 earnings

Outlook Cut

The management lowered its full-year earnings guidance to the range of $9.10 per share to $10.35 per share, before the year-end MTM retirement plan accounting adjustment. It also slashed earnings outlook to $10.25- $11.50 per share, before the year-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses and aircraft impairment charges.

The downward revision reflects lower-than-expected revenue at each of the company’s transportation segments and bigger-than-expected expenses due to the shift to residential delivery services.

 

Sources: FedEx, AlphaStreet

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