Original title:FedEx CorpWill start to win in fiscal year 2021AmazonSource: Sina Technology
Sina Science and Technology News Beijing time on the morning of December 19th, the unstable relationship with Amazon.Com Inc may be one of the reasons for the sharp decline in FedEx Corp's profits in the second fiscal quarter, but the express company said that the company is likely to turn losses into profits in fiscal year 2021, and its growth rate will exceed Amazon.Com Inc's.
"if you think about all the positives we have said and seen, when we enter fiscal year 2021, we will start to outperform Amazon.Com Inc." FedEx Corp CFO Ellen Graff Jr. (Alan B.Graf Jr.) said in an earnings call held after Tuesday's trading. "our situation will improve for the rest of this year and even next year."
FedEx Corp has invested heavily to expand its ground delivery service, which is open all year round. Mr Graff said these investments, coupled with FedEx Corp's "operational synergy" in the European market, would begin to pay off in the company's fiscal year 2021.
After trading on Tuesday, FedEx Corp reported weaker-than-expected second-quarter results and cut its earnings forecast for fiscal 2020, causing its shares to close down more than 10 per cent on Wednesday. FedEx Corp's market capitalization has wiped more than $4 billion since the close on Tuesday. The company blamed the disappointing quarterly results on weak global economic conditions, rising costs associated with the expansion of ground delivery services, the transfer of online holiday sales to the third quarter and "the loss of a major customer's business". Graff later confirmed that the so-called "big customer" refers to Amazon.Com Inc.
"the ground delivery service contract between FedEx Corp and Amazon.Com Inc expired in August, which had an impact on results in the first quarter, but had an even greater negative impact on results in the second quarter," Graff said on a conference call. "
FedEx Corp announced in August that the company planned to terminate its ground delivery service contract with Amazon.Com Inc, after suspending its US express delivery contract with Amazon.Com Inc in June. Amazon.Com Inc fought back earlier this week, announcing that it would temporarily ban third-party merchants from using FedEx Corp's ground delivery service, which currently accounts for 58 per cent of Amazon.Com Inc's total goods sold. Amazon.Com Inc said the decision was made because FedEx Corp performed poorly in delivery and ensured that shoppers would receive parcels in time before Christmas. Amazon.Com Inc did not say when the service would be resumed.
For sellers, the annual holiday shopping season is the busiest shopping season of the year, and Amazon.Com Inc's move could throw his business into chaos. Sellers are forced to find new delivery services, which could lead to higher upfront costs.
In the past year, the "war of words" between Amazon.Com Inc and FedEx Corp has obviously heated up. FedEx Corp once denied that Amazon.Com Inc posed a threat to him, but began to mention Amazon.Com Inc as his competitor in September. Amazon.Com Inc is setting up his own delivery network, gradually working with FedEx Corp andUnited Parcel Service IncThe company (UPS) distanced itself. (Tang Feng)