Analysts Meeting

Discussion in 'FedEx Discussions' started by fessup, Oct 6, 2012.

  1. fessup

    fessup Member

    Fedex (FDX) Investor Day Preview: What To Watch For?

    "We continue to see material cost opportunities as a result of expected actions which include: voluntary employee severance, aircraft retirement, head count reductions, and directing parcels to Ground," Deutsche Bank analyst Justin Yagerman said in a note to clients.

    FedEx can reduce head count through attrition with its rank and file, and expect some additional reductions from retirement and voluntary buy outs. It has been in the process of "significant actions" to reduce costs to better match anticipated demand at Express. The cost savings should aid margin expansion at express despite a soft economic backdrop.

    On the flip side, if the company if the company fails to announce meaningful cost savings at the upcoming investors and lenders' meeting, then it could invite trouble.

    "The Street has patiently waited for over six months as expectations have grown (we believe the current bogey is $500 million of annual cost savings from the express initiatives). The mere parking of capacity or accelerated aircraft retirements will not be enough to satisfy buy side expectations, in our opinion," the analyst noted.

    FedEx should convince investors that it is serious about improving returns, enhancing free cash flow generation, and has a viable plan to increase the company's earnings power. The failure to demonstrate a long-term strategy that incorporates these items would likely impair the company's valuation multiple. FedEx is trading 12.8 times its full-year consensus earnings estimate versus peer United Parcel Service's (NYSE: UPS : 73.1, 0.13) 15.5 times.

  2. hypo hanna

    hypo hanna Well-Known Member

    Basically the front line employee is screwed. Freddie and his cronies dance to the Wall Street fiddler. They are deaf to the people who sacrificed so much to get them there.
  3. vantexan

    vantexan Well-Known Member

    Just wish they'd include senior couriers in the voluntary severance. I plan to take my pension at 55 in 4 years but if we're getting minimums I'll probably cash out my portable pension at 53.
  4. Cactus

    Cactus Just telling it like it is

    Absolutely right. Once again it's all about THEM.
  5. TUT

    TUT Well-Known Member

    And that is why it's a world issue. These outside forces, force Fedex's hands in what they need to do. Even if Fedex was ok with what has been happening, people that trade paper for a living aren't. Sad state for real business.
  6. MrFedEx

    MrFedEx Engorged Member

    Sort of. FedEx has been wasting money for years, primarily due to poor upper management decisions, not high-living hourly workers. Once again,I point to their decision to double-down on the DC10 family of aircraft. They were still buying as many as they could get their hands on 7 years ago, and converting them from PAX to cargo, and then to MD10 configuration. Very expensive, and now those planes will be scrapped as soon as replacments arrive. A very bad series of choices. The Kinko's purchase and subsequent re-branding was a bad idea that has just gotten worse over time.

    In the meantime, hourly workers continued to be expected to do more, while having more takeaways and expenses thrust upon them. Our insurance premiums and deductibles are very high, and going up $36 per mo if you have the Premier Plan. Oh, and the already high deductibles get higher. The traditional pension plan, profit sharing, jumpseat, shift premiums and decent wage increases have all gone away. Stagnant wages, less benefits, and it still takes forever to top out in terms of wages. And now...a defacto wage cut through hours reductions and/or 6 hour split shifts. Watch for the 35 hour guarantee for full-timers to disappear next.

    All the while, the upper echelon has been rewarding itself with much higher compensation packages and perks. It has become crystal clear to most of us that hourlies simply do not matter. We are the cannon fodder that gets tossed out there to be chewed-up and spit-out, and we are totally expendable. Produce...or else.

    FedEx is totally OK with what is happening because it simply translates to more profit, which is all that really matters. Personally, I don't think their cost-cutting measures will be completely effective because the company is still incompetently managed, and it is catching-up with them.

    We'll see.
    Last edited: Oct 7, 2012
  7. Cactus

    Cactus Just telling it like it is

    Excellent point. Without a complete overhaul of upper management including Smith, the infection that has crippled this whole comapny will continue to persist. It's like trying change the oil of an engine that has already blown up.
  8. Cactus

    Cactus Just telling it like it is

    No kidding. Just as bad or worse than Zapmail. Funny how FedEx repeat themselves. Didn't Fred more or less expect Ken May to straighten out Kinkos virtually overnight?
  9. MrFedEx

    MrFedEx Engorged Member

    Yes, he did. Mr. May was tossed under the bus. Personally, I think Ken was too much like an actual human being to stay with FedEx. He was eliminated by tasking him with the impossible.
  10. Ken May had a great plan and took his best shot and failed because the company is an abject failure. Tuesday will tell if they right size or if they continue to be obsessed with allowing this dump to bleed them dry.
  11. Goldilocks

    Goldilocks Well-Known Member

    You have opened my eyes to many things I chose not to see. We gave our Hearts and Soul to Federal Express and now this is what we are getting in return.


    So, on the upside, we know that the upper managerment are just as willing to gut each other for being humane to us as they do to lower management when they act like a "person" and not a tyrannical maniac. What an interesting business model.
  13. vantexan

    vantexan Well-Known Member

    Mgr that lied to me to get me to transfer to previous station in TX was just fired. Heard a reason why, but was probably a cumulation of things. There's a senior courier there who's like a pitbull, going over local management's heads every time he feels he's being screwed with. And I mean every time, LOL!
  14. It's started already. Inside sources have confirmed that in a bazaar move, FXO has changed the budgets downward for each office which should mean that cuts and reductions will hit the centers. I hope I get punished with a buyout for my years of hard work and effort.
  15. MrFedEx

    MrFedEx Engorged Member

    Glad you're seeing the light. I was there too when this was a great company. Unfortunately, those days are long over, and our sacrifices have been repaid with what is unfolding right now....the shaft.
  16. Goldilocks

    Goldilocks Well-Known Member

    This is exactly what more people need to be doing. By pass your local personel and call Memphis Personel. Things seem to get swept under the rug with local personel. But once you call Memphis Pers, all hell breaks loose....
  17. Route 66

    Route 66 Bent Member

    Goldi, do we tear up that BZ to FS now?:happy-very:

    I have to liken the experience to that of a jilted spouse of many years "I gave you the best years of my life and now....this! certainly not the assurances I had in the beginning of the relationship. No need for a prenuptial agreement (union). We would take care of each other as we grew old together. I demonstrated complete loyalty to you, as I naively believed ....Now you've kicked me to the curb as I'm evidently 'too high-maintenance' ...Now what am I supposed to do?...Who will want me at my advanced age?"
  18. MrFedEx

    MrFedEx Engorged Member

    Using you analogy,Fred is a serial cheater and a "wife" beater. We are abused spouses.
  19. hypo hanna

    hypo hanna Well-Known Member

    Great analogy! I would add that the kool aid drinkers are the spouse that takes the regular beating but convinces herself that he really doesn't mean it and takes him back every time.
  20. MrFedEx

    MrFedEx Engorged Member

    If Fred were my "husband", he'd have a head full of rolling-pin bumps to show for it. Maybe even a Bobbittectomy.