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FedEx profits slip after booting major customer Amazon

Losing Amazon as a customer is weighing on FedEx's bottom line.The delivery company on Tuesday...

Posted: Sep 18, 2019 9:32 AM

Losing Amazon as a customer is weighing on FedEx's bottom line.

The delivery company on Tuesday posted a slight revenue decline and a 12% drop in operating income for the three months ending August 31, compared to the same period last year. Contributing to that decline, the company said, were global trade disputes, increased costs related to the expansion of its delivery services and the "loss of business from a large customer," a likely reference to Amazon.

FedEx's stock fell nearly 10% in after-hours trading.

Amazon used FedEx previously to deliver online orders to consumers. But Amazon has in recent years become a serious competitor to FedEx as it builds out its own distribution network. In June, FedEx said it would not renew its contract with Amazon for air cargo services, saying it would focus instead on other e-commerce companies such as Walmart and Target.

Then in August, FedEx said it would also stop providing ground delivery services to Amazon. FedEx has noted that Amazon made up only around 1.3% of its revenue in 2018, but losing the business of the e-commerce leader was a sign of growing competition in the logistics business.

In its Tuesday statement, FedEx lowered the forecast for its full-year 2020 earnings, citing the loss of that "large customer," as well as global trade tensions and a weakening global economic outlook. The company now expects earnings per share of $10 to $12. In 2019, FedEx posted full year earnings per share of $2.03, a particularly low number owing to its acquisition of European express delivery company TNT Express. The prior year, earnings were $16.79 per share.

"FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty," FedEx Chief Financial Officer Alan Graf, Jr. said in a statement, adding that the company will make some reductions to its Express air network to cut costs.

The company is also hiking shipping rates again — starting on January 6, 2020. The cost to ship with FedEx Express, FedEx Ground and FedEx Home Delivery will increase by an average of 4.9%, and FedEx Freight shipping rates will increase an average of 5.9%.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 485655

Reported Deaths: 6558
CountyCasesDeaths
Hennepin1007641586
Ramsey43106801
Dakota36297390
Anoka33293385
Washington22078256
Stearns18734201
St. Louis14805262
Scott13290107
Wright12526115
Olmsted1178988
Sherburne872872
Carver772640
Clay691587
Rice670491
Blue Earth594735
Kandiyohi579574
Crow Wing520681
Chisago499045
Otter Tail482170
Benton446490
Winona418349
Mower404731
Douglas392668
Nobles387047
Goodhue385768
Polk343162
McLeod339349
Beltrami337951
Morrison324547
Itasca313046
Lyon313044
Becker311342
Isanti306154
Steele300411
Carlton300149
Pine282016
Freeborn280723
Nicollet258641
Todd248030
Brown245037
Le Sueur235320
Mille Lacs227447
Cass220024
Waseca208717
Meeker207434
Martin189528
Wabasha18653
Roseau180217
Hubbard160640
Houston157314
Dodge15224
Renville149640
Redwood147027
Fillmore13728
Chippewa136335
Cottonwood134820
Pennington134416
Wadena130920
Faribault123017
Aitkin118833
Sibley117310
Watonwan11738
Rock115714
Kanabec107519
Pipestone101424
Yellow Medicine97617
Murray9448
Jackson93510
Swift87918
Pope8045
Marshall77815
Stevens7418
Lake74018
Clearwater71914
Lac qui Parle68416
Wilkin67110
Koochiching61811
Big Stone5163
Lincoln5062
Grant4918
Norman4788
Unassigned46768
Mahnomen4417
Kittson40921
Red Lake3625
Traverse3055
Lake of the Woods2191
Cook1180

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 362827

Reported Deaths: 5440
CountyCasesDeaths
Polk58260551
Linn20670313
Scott18318210
Black Hawk16258292
Woodbury14979211
Johnson1384874
Dubuque13562194
Dallas1138690
Pottawattamie10791143
Story1024945
Warren556674
Clinton543784
Cerro Gordo533782
Webster519587
Marshall497272
Sioux494869
Buena Vista474537
Des Moines458861
Muscatine452291
Wapello4345108
Jasper417766
Plymouth395378
Lee375452
Marion359169
Jones294154
Henry293337
Carroll286249
Bremer280854
Crawford275135
Boone259730
Washington254347
Benton253854
Mahaska224746
Jackson221638
Dickinson217840
Tama213765
Kossuth208555
Clay193625
Hamilton192142
Delaware189140
Winneshiek189127
Buchanan185729
Fayette185235
Page183319
Hardin181439
Wright179931
Harrison179469
Cedar178523
Clayton168154
Butler167231
Mills163020
Floyd162741
Cherokee154836
Madison154718
Poweshiek154330
Hancock147130
Allamakee146747
Lyon145941
Iowa145023
Appanoose139247
Grundy139230
Jefferson138734
Winnebago138631
Cass134751
Calhoun133811
Mitchell130940
Louisa128241
Union126631
Chickasaw125215
Sac124618
Emmet121740
Shelby121733
Franklin118319
Humboldt117925
Guthrie116628
Palo Alto105221
Montgomery104136
Howard102921
Clarke100420
Unassigned9900
Keokuk98229
Monroe93328
Adair92128
Ida91432
Pocahontas85419
Davis83123
Monona81627
Greene77510
Lucas74021
Osceola70615
Worth6997
Taylor66612
Fremont5909
Decatur5829
Van Buren56118
Ringgold52320
Wayne48921
Audubon4889
Adams3274
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