FedEx Saying We’re No UPS Fails to Erase Stock Slump - Bloomberg
Minutes after UPS sent its stock tumbling with a surprise warning that fourth-quarter profit was cut by surging costs, FedEx took an unusual step.
The competing package-delivery company issued a succinct statement meant to reassure investors: We’re sticking with our forecast for 2015 profit. FedEx Corp.’s per-share earnings will be $8.50 to $9 this year, same as the company said before. That assumes moderate economic growth and a modest benefit from falling fuel prices.
The message was clear. FedEx wants to avoid being compared with United Parcel Service Inc., which suffered after spending a fortune to ensure that packages get delivered on time during the year-end peak-demand season. Sure, UPS avoided the delays that marred the 2013 holiday. Even so, margins were crimped by all those increased expenses for a system that wasn’t fully utilized some days.
Minutes after UPS sent its stock tumbling with a surprise warning that fourth-quarter profit was cut by surging costs, FedEx took an unusual step.
The competing package-delivery company issued a succinct statement meant to reassure investors: We’re sticking with our forecast for 2015 profit. FedEx Corp.’s per-share earnings will be $8.50 to $9 this year, same as the company said before. That assumes moderate economic growth and a modest benefit from falling fuel prices.
The message was clear. FedEx wants to avoid being compared with United Parcel Service Inc., which suffered after spending a fortune to ensure that packages get delivered on time during the year-end peak-demand season. Sure, UPS avoided the delays that marred the 2013 holiday. Even so, margins were crimped by all those increased expenses for a system that wasn’t fully utilized some days.
