FedEx Reports Bad Quarterly Financial Results Months After Cutting Its Partnership With Amazon

FedEx, United Parcel Service, and the United States Postal Service are the three largest couriers in the United States, with each of them having brought in $69.7 billion, $71.8 billion, and $70.7 billion in their most recent fiscal reporting years, respectively, in revenue. According to Market Watch, each of them engages in international operations, though most of the revenue each of them brings in comes from right here within the United States.

The first two companies – FedEx and UPS – are both public companies, meaning their stock is traded on public stock exchanges like the New York Stock Exchange, whereas the United States Postal Service, or USPS for short, is a government agency that acts independently of all other parts of the federal government.

As the years have gone by, these couriers – all three of them – have seen an uptick in demand from e-commerce retailers, especially Amazon. Although the same isn’t true now, as FedEx and Amazon stopped partnering so closely with one another, with the former company sharing back in June 2019 that it would be declining its option to renew the pair’s annual contract to ship packages in express form throughout the United States to the tune of some $850 million in revenue. With FedEx’s annual revenue already mentioned above, it’s easy to see that $850 million in terms of revenue isn’t much more, relatively speaking, than 1.25 percent of the company’s revenues in that same year.

Two months later, in Aug. 2019, FedEx also turned down the opportunity to take Amazon’s packages and transport them via ground to consumers around the nation.

All considered, Amazon-related revenue didn’t take up that large of a chunk of FedEx’s total revenue. Despite this fact, Amazon domestic shipping via ground-based means offered FedEx a disproportionate amount of profits as compared to other ways that FedEx brought in money from sales.

FedEx’s operating income for the most recent financial quarter, the second quarter of the current financial reporting period – the company’s fiscal year started on Feb. 1, 2019 – dropped a whopping 12 percent in terms of the year-on-year comparison of current quarterly change to that of the previous year. Keep in mind that FedEx only dropped the two lines of Amazon-related services three and one months ago, respectively.

After the company’s report that contained this info and more – lots of it wasn’t so great, either, just like what is mentioned above – was put out, FedEx’s stock managed to fall nearly one-tenth of its value from the close of Tuesday’s trading until roughly midnight Eastern Time.

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