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Fly News Breaks for February 10, 2020
FDX, UPS
Feb 10, 2020 | 08:24 EDT
Shares of FedEx (FDX) rallied 5% on Friday after the company announced an initiative for Ground to handle a portion of Express's residential deliveries, JPMorgan analyst Brian Ossenbeck tells investors in a research note. The analyst believes the program should help lower delivery costs but he disagrees with the implication that it is the first step toward fully integrating Express and Ground. The two networks have a limited overlap in service lines, operating locations, and employment models, he contends. However, Ossenbeck expects FedEx shares will hang on to its recent gains. FedEx looks increasingly attractive versus UPS (UPS), which faces valuation pressure from its Amazon (AMZN) disclosure and "persistent" earnings quality issues, says Ossenbeck. In the interim, though, he remains cautious on FedEx's push to be the low-cost e-commerce carrier and keeps a Neutral rating on the shares.
News For FDX;UPS From the Last 2 Days
FDX
Apr 3, 2020 | 10:03 EDT
In a regulatory filing earlier, FedEx said the independent members of the board of directors of the company, based upon the recommendation of its Compensation Committee and at the request of Frederick Smith, the company's Chairman of the Board and CEO, approved a 91% reduction in Smith's base salary for the six-month period from April 1, 2020 to September 30, 2020. As a result, Smith's base salary has been reduced from $115,402 per month to $10,728 per month for this six-month period, which will result in net pay of $1 per pay period after tax withholding and other deductions.
FDX
Apr 3, 2020 | 10:01 EDT
FedEx said in a regulatory filing: "We are taking further actions to manage our cash flow and improve our liquidity, including review and consideration of opportunities and strategies for capital expenditure reductions and deferrals, operating expense reductions, and consideration of alternative financing sources in addition to our credit facilities and access to public markets. We have implemented temporary surcharges on all international package and airfreight shipments and temporarily eliminated our money-back guarantee for all Federal Express Corporation ("FedEx Express"), FedEx Ground, and FedEx Freight Corporation services as well as FedEx Office and Print Services, Inc. same-day services. We also expect to benefit from certain of the relief provisions of recently enacted and future government programs intended to provide economic relief to U.S. and global businesses in response to the COVID-19 pandemic, including relief from certain excise taxes and payroll tax deferrals in the United States. In addition, we are eligible to participate in certain government grant, loan, loan guarantee and investment programs. Participation in any government grant, loan, loan guarantee or investment programs may subject us to additional regulations and/or restrictions, including dividend, compensation and stock repurchase restrictions and potentially require us to grant equity interests in FedEx to a government agency."