Many people on the thread are focusing on the delivery segment of FDX and only accounting for a bump from internet commerce. The article below makes some interesting comments. Please note this one in particular:
"A spokesman for Memphis, Tenn.-based FDX said the company would not specify how much revenue it generated from
Internet business. But he said retail deliveries were not a substantial portion of FedEx's Internet-related business. Instead,
businesses that have become accustomed to a ''just-in-time'' inventory strategy are key to FedEx's Internet business."
What many people fail to realize is that FDX has a significant "technology" component which complements its services. This is just beginning to unfold. Remainder of article pasted below.
Monday December 7, 7:01 pm Eastern Time
FDX shares rise after report on Internet potential
(New throughout; adds analyst comments, byline; updates
negotiations.)
By Brad Dorfman
CHICAGO, Dec 7 (Reuters) - Shares of FDX Corp. (NYSE:FDX - news)
jumped on Monday after a newspaper said the company -- parent of Federal Express, the world's largest air express
carrier -- expected to the boom in Internet commerce to benefit the company far more than many observers expect.
In Monday's edition of Barron's, the business newspaper described FDX -- which delivers many of the goods bought via
retailing sites on the Web -- as perhaps the ''cheapest Internet stock on the market.''
FDX shares rose to a 52-week high of $79.50 Monday before receding to close at $72, up $4.75 on the day in trading
on the New York Stock Exchange.
Analysts said the article prompted the share price's rise, though they pointed out that the company's Internet connection
was not news.
''It's a bull market looking for anything with a '.com' behind the name,'' said Douglas Rockel, an analyst who follows
FDX for ING Baring Furman Selz.
The newspaper quoted FDX Chief Executive Fred Smith saying that the company should benefit far more than people
expected from the growth of electronic commerce.
''None of this is any new news,'' John Pincavage, analyst at Warburg Dillon Read, said
A spokesman for Memphis, Tenn.-based FDX said the company would not specify how much revenue it generated from
Internet business. But he said retail deliveries were not a substantial portion of FedEx's Internet-related business. Instead,
businesses that have become accustomed to a ''just-in-time'' inventory strategy are key to FedEx's Internet business.
''The Internet enables customers, using FedEx ... to sell and source globally without regard to time and distance,'' FDX
spokesman Gregory Rossiter said. ''There is no other medium that enables that.''
Since the union representing FedEx pilots agreed Nov. 20 to lift the possibility of a strike during the Christmas shipping
season, FDX shares have risen about 24 percent.
On Friday, the chief negotiator for the pilots said negotiations had ''improved'' and that a settlement could be reached by
Christmas. Scheduling and compensation are two key issues in the talks, which resumed Nov. 23.
That run-up in the stock caused one analyst to lower his rating on FDX Monday.
Steve Lewins, analyst at Gruntal & Co., cut FDX to ''hold'' from ''strong buy,'' citing the price move. |
