A quarter of “improved profitability” despite the “difficult demand environment” is how FedEx sees its latest financial results. It reported a quarterly revenue of $21.7 billion. That’s a decline of nearly half a billion dollars compared to last year.
FedEx delivered its financial results for the third quarter, which ended in February. The Q3 income and margin improved despite lower revenue. The company partially attributed it to “continued focus on revenue quality.”
Raj Subramaniam, an optimistic CEO and president, reckons there is “meaningful progress on transformation,” vowing that he’s “never been more confident in our path ahead.”
FedEx has pulled out all stops to safeguard the profit margins at its Express division. Reuters reports on measures to achieve this, including “parking aircraft, reducing flight hours and efforts to fly fewer jets.” Its overnight delivery unit, Express, had seen a dwindling number of parcels, reportedly linked to USPS’ changes to air travel options.
The parcel firm’s shares have also increased by 13%. Evercore ISI analyst Jonathan Chappell has told Reuters that the positive stock price is “nearly strictly a function of the Express margins easily beating expectations.”
FedEx partnering with Amazon again?
The same week FedEx reported its new outlook, reports surfaced that it considered partnering with Amazon again last year. Information about the meeting only came out this week, although nothing seems to have come from it.
It did, however, signal that FedEx is not against considering partnering with Amazon for return logistics. It also highlights how important returns are for customers and that these giant companies are exploring new options.
The Wall Street Journal has exclusive information about a meeting behind closed doors last year. Although nothing came of the meeting, sources believe it “illustrates shifts in the growing business of handling parcels that customers send back.”
The idea of a partnership is plausible. The two companies have a history that stretches back to 2019. However, the cracks surfaced when Amazon invested in its delivery services. FedEx never renewed the contract.
Shift in leadership
FedEx will soon have one of its top jobs open as veteran Robert Carter steps down from his duties. He’s been with the company for over 31 years and will retire in June.
Although he will remain with the company as a senior advisor until the end of the year, it opens up a space for new, fresh blood.
Sriram Krishnasamy will serve as chief digital and information officer. This plays a critical role in technology, systems, and data, which leads to important information and insights.
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