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FedEx Freight | FedEx Corporation Quarterly Report Q-1 FY19

SwampRatt

SwampRatt

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FORM 10-Q | Quarterly Report

Q1: 07-19-18 Earnings Summary

https://seekingalpha.com/filing/4172322

A screen shot of FedEx Freight numbers:

VfO6zDG.jpg

Operating margin 9.0%






Directly from FedEx:

http://s1.q4cdn.com/714383399/files/doc_news/earnings/2019/FedEx-Q1-FY19-Earnings-Release.pdf
 
FedEx Freight Segment Revenues


"FedEx Freight segment revenues increased 18% in the first quarter of 2019 primarily due to higher revenue per shipment and average daily shipments. Revenue per shipment increased 8% in the first quarter of 2019 primarily due to higher base rates driven by our ongoing yield management initiatives and higher fuel surcharges. Average daily shipments increased 9% in the first quarter of 2019 due to higher demand for our service offerings."


FedEx Freight Segment Operating Income

"FedEx Freight segment operating income increased 7% in the first quarter of 2019 primarily driven by higher revenue per shipment. Operating margin declined slightly in the first quarter of 2019 due to increased salaries and employee benefits expense and higher purchased transportation expense. In addition, the increased variable compensation accruals during 2019 and accelerated annual merit pay increases during late 2018 for certain of our hourly employees following the passage of the TCJA (described in the “Overview” section above) negatively impacted the year-over-year comparison of operating income by approximately $30 million.

Salaries and employee benefits expense increased 17% in the first quarter of 2019 driven primarily by higher staffing levels to support volume growth as well as the pay increases noted above. Purchased transportation expense increased 31% in the first quarter of 2019 due to increased rates, higher fuel surcharges and higher volumes."
 
This is worth repeating, from above:

"Operating margin declined slightly in the first quarter of 2019 due to increased salaries and employee benefits expense and higher purchased transportation expense. In addition, the increased variable compensation accruals during 2019 and accelerated annual merit pay increases during late 2018 for certain of our hourly employees following the passage of the TCJA (described in the “Overview” section above) negatively impacted the year-over-year comparison of operating income by approximately $30 million.

Salaries and employee benefits expense increased 17% in the first quarter of 2019 driven primarily by higher staffing levels to support volume growth as well as the pay increases noted above. Purchased transportation expense increased 31% in the first quarter of 2019 due to increased rates, higher fuel surcharges and higher volumes."

Worth remembering, from Dec. 2017:

https://www.cnbc.com/2017/12/20/fed...nt-5-billion-earnings-boost-from-tax-cut.html

"FedEx said the Republican-backed tax bill would deliver it a windfall: nearly $1.5 billion in higher earnings next year."

And the year after, and the year after that...

:popcorn:
 
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https://seekingalpha.com/article/42...mith-q1-2019-results-earnings-call-transcript

" FedEx has announced last week that we'll be hiring 55,000 additional team members for this holiday season to ensure we deliver the Purple Promise that has already been mentioned as well.

The majority of these team members, however, will stay on with FedEx after the holiday peak or become permanent employees of FedEx. Our HR planning occurs year round, our peak hiring, our efforts our year-round. I can tell you that right after the holiday season is over, we start the process in every operating company."
 
FedEx lower after wages/bonuses drag down profit

https://seekingalpha.com/news/3391038-fedex-lower-wages-bonuses-drag-profit?dr=1#email_link

Nonsensical analysis above.

FedEx: Taking Another Look At $250

https://seekingalpha.com/article/4206989-fedex-taking-another-look-250?dr=1

"FedEx gave some mixed messages about the higher costs for wage increases following the tax cuts while guiding up the rest of the year. The $170 million in additional costs did have a $0.48 negative impact on earnings."

A better take in the second story. (hint: bargain)

Again, don't forget the rest of the story:

FedEx projects a nearly $1.5 billion earnings boost from tax cut

https://www.cnbc.com/2017/12/20/fed...nt-5-billion-earnings-boost-from-tax-cut.html
 
Boats n hoes said:
9% operating margin is good right? Cant remember. Good first quarter towards that bonus in January
Click to expand...
10% Operating Margin would be 2.75% by the chart we used to use, but that formula was based only on Fedex Freight results. The bonuses are now supposed to be based on results from all of the Fedex Opcos. Haven’t heard if the formula is the same now as before as to percentages. If so the percentage for payout would only be around 1.75% since the operating margin for the combined Opcos was only 7%. Also keep in mind that the next quarters results will be combined with this quarter for the payout and may either increase or decrease the amount.
 
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Purple Hammer said:
10% Operating Margin would be 2.75% by the chart we used to use, but that formula was based only on Fedex Freight results. The bonuses are now supposed to be based on results from all of the Fedex Opcos. Haven’t heard if the formula is the same now as before as to percentages. If so the percentage for payout would only be around 1.75% since the operating margin for the combined Opcos was only 7%. Also keep in mind that the next quarters results will be combined with this quarter for the payout and may either increase or decrease the amount.
Click to expand...


In layman’s terms, suck it
 
Boats n hoes said:
9% operating margin is good right? Cant remember. Good first quarter towards that bonus in January
Click to expand...
Sadly (coincidentally?), now that Freight is kicking it, the bonus is said to be based on "enterprise wide" numbers. Today, half way into the presumed reporting period, we still don't know exactly what the basis for the bonus will be. :nono h4h:
 
Purple Hammer said:
10% Operating Margin would be 2.75% by the chart we used to use, but that formula was based only on Fedex Freight results. The bonuses are now supposed to be based on results from all of the Fedex Opcos. Haven’t heard if the formula is the same now as before as to percentages. If so the percentage for payout would only be around 1.75% since the operating margin for the combined Opcos was only 7%. Also keep in mind that the next quarters results will be combined with this quarter for the payout and may either increase or decrease the amount.
Click to expand...
Absolutely true.

Anyone want to predict what it might be? Perhaps on an over/under basis? Are we allowed to place bets on here?
:smilie93c peelout:
 
Who gives a ****?
Bonus?
$300ish. Wtf is an employee going to do with an extra $300 every 6mo,pay his summer elec bill ONE TIME?

Almost 2020,and Fx is giving out bonus checks like it's 1950.


Besides, keep the bonus, and pay a good wage.
If drivers were getting paid like the market demands, you'd make that bonus up in 2 weeks time.
 
True! Of course this company could give u a 5 dollar an hour raise today without blinking an eye, but what the hell would happen if the economy had a big hiccup? Pull back the wage hikes? Just askin’
 
FedexLube said:
True! Of course this company could give u a 5 dollar an hour raise today without blinking an eye, but what the hell would happen if the economy had a big hiccup? Pull back the wage hikes? Just askin’
Click to expand...
That's not how any of this works.


An employee's wage is not contingent upon hypothetical economic conditions of what may/may not happen in the future.
If that's the case, why not take it further, and say "what if the economy grows by 25% in the next 5yrs,so pay them $75hr?"

Also,ours are trade jobs. No different than a plumber, electrician, pipe fitter, ect. Their pay is not contingent upon possible future economic conditions..

Lastly, if wages were increased, and the economy tanked, the same thing would happen that has always happened.
Layoffs.
Do electricians get paid less when there is less work construction going on? No.


Bottom line. Cdl wages have stagnated over the last decade, and are far behind where they should be..
 
Clandestine_ice said:
Yellow and others pulled back the hourly wage a few years back as did many employers. So yes, in theory it could work
Click to expand...
I dont think you could have picked a worse example.

Yeah, Yrc (the employees) did do that, and not only would that ::shit:: not fly today, but look at their current situation. Completely assed out, and in about 8mo, there's going to be a reckoning.
Almost every Yrc driver I personally know, said they will walk out if their pay is not reinstated in April.


Also, and I think we can all agree, that YRC is a perfect model for how NOT to run an Ltl operation.
 
No F-bdy Bs said:
Who gives a :censored:?
Bonus?
$300ish. Wtf is an employee going to do with an extra $300 every 6mo,pay his summer elec bill ONE TIME?

Almost 2020,and Fx is giving out bonus checks like it's 1950.


Besides, keep the bonus, and pay a good wage.
If drivers were getting paid like the market demands, you'd make that bonus up in 2 weeks time.
Click to expand...


Who gives a :censored:?

I do, for one.

Do we have to refresh our memory? The bonus came back, in part, as justification for a lower than expected wage increase at the time. The bonus was also redesigned to reflect Freight numbers, rather than combined OP-CO numbers. Freight numbers at the time were NOT very good, while Corporate numbers were very good.

The numbers you are tossing out fail to take into account the significant improvements going on at Freight. We are on track to make consistent double digit operating ratios, which would equate to $800-$1300+ bonuses. Not likely under this new (not yet known) plan.

Now is not the time to change the parameters, or worse, drop the program, IMHO. It is/was a part of our wages and benefits.

Would I be happy with a straight wage hike, rather than a bonus, subject to manipulation? Of course. I said it back when the bonus began. But since we got the bonus program, it might be nice to enjoy the good times, now that they are likely bearing fruit.

:chairshot::smilie93c peelout:
 
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