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Third Bridge Group Global head of analysts Peter McNally joins Market Domination Overtime to analyze FedEx's (FDX) fiscal second quarter earnings and its announcement to split into two business units. The parcel carrier and logistics operator aims to spin off its FedEx Freight segment.
"FedEx hasn't sat still for a long time," McNally says, noting that while the split was expected, challenges lie ahead. He highlights FedEx Freight's strong performance within its segment but points to the company's second guidance cut in three months. Despite solid business operations, he cites headwinds including competition and a weak industrial environment "that is dragging results."
McNally questions "how much more costs can be driven out of this business." He observes that the "easy" cost-cutting measures have "pretty much been done," adding that clarity on how the separated businesses can achieve further cost reductions remains uncertain.
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This post was written by Angel Smith