Can an Ex-Amazon FedEx Be Successful?
If its fiscal first-quarter report is any indication, Federal Express (NYSE: FDX) may have a difficult time reinventing itself in a brave new post-Amazon.com (NASDAQ: AMZN) world. Last week, FedEx announced earnings that fell short of analysts' expectations and also lowered its full-year 2020 outlook. The company cited disruptions related to the U.S.-China trade dispute, ongoing economic weakness and political uncertainty in Europe, increased FedEx Ground costs, and "the loss of business from a large customer." It doesn't take much of an imagination to read through the lines and understand that FedEx is already reeling from its breakup with Amazon.
Earlier this year, FedEx decided to cut ties with Amazon by not renewing its express shipping contract with the online shopping powerhouse. Just last month, management also decided not to renew the ground shipping contract. As Amazon continues to build out its own delivery fleet, pressure on FedEx to rise above the daunting new competition is mounting. While more time is needed to get a better judgment on the success of FedEx's strategy, the recent results didn't do much to give investors confidence in the company's ability to go it alone without Amazon.
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Source Fool.com
