FedEx reported its fiscal first quarter results, disappointing earnings and revenue estimates as well lowering its guidance. For the three months ending August, the courier delivery services company reported adjusted earnings of $3.05, below  analysts’ expected $3.17.  The earnings were around -11.85% lower than the year-ago period. Revenue of $17.05 billion also came in lower than analysts’ estimate of $17.14 billion .Sales remained flattish from the same quarter in the prior year. Looking ahead, FedEx cut its fiscal full year 2020 guidance to $11 to $13, citing major global headwinds in the form of trade tensions, global economic slowdowns, increase in FedEx Ground costs and losing a “large customer” (read: Amazon) in August. Analysts expected $14.69.

On Wednesday, courier delivery service company FedEx revealed that it will end its ground-delivery contract with Amazon, and that it won’t renew it at the end of the month. FedEx dubbed the cancellation as a “strategy to focus on the broader e-commerce market”. In June, FedEx had announced that it was ending its express U.S. shipping contract with the e-commerce giant, a decision which only affected air services. At the time, FedEx said that less than 1.3% of its total revenue came from serving Amazon during the 12-month period ended Dec. 31. In late June, Amazon unveiled its Delivery Service Partners program through which it aims to attract entrepreneurs who can create their own local delivery networks with up to 40 vans each.

JB Hunt Transport Services reported second quarter revenues which beat analysts’ expectations.Also, earnings were impressive, excluding a legal charge. The trucking and transportation company’s revenues increased +6% to $2.26 billion, just ahead of analysts' forecasts. Although JB Hunt’s overall earnings of $1.23 per share came in lower than analysts’ estimate of $1.35, the earnings-per-share figure excluding the one-off effect of a pretax charge of 14 cents (from a legal settlement) would be higher than estimates. JB Hunt shares traded 6.5% higher on Tuesday.

FedEx (FDX +0.6%) is down sharply from its earlier trading level after CNBC reports that the company has made the "strategic decision" not renew the FedEx Express U.S. domestic contract with Amazon (AMZN +2.5%).

United Parcel Service (UPS) earnings and revenue missed analysts’ estimates. The package delivery/supply chain management company reported adjusted earnings of $1.39 a share, below analysts’ estimates of $1.42 a share (based on FactSet poll).The figure is also lower compared to the year-ago quarter’s $1.55 a share. Apparently, the winter weather set back profit by about $80 million (or 7 cents a share), as indicated by the company.

The Federal Aviation Administration is overseeing the program. Replacing standard delivery cars with drones will be a unique as UPS can use Matternet’s M2 quadcopter drone that can carry medical samples of up to 5 pounds as far as 12.5 miles. UPS further revealed that the program will begin with numerous planned daily revenue flights at the WakeMed Raleigh campus.Using a UPS secure drone container, WakeMed employees can now load medical specimens like blood samples and send them to a nearby WakeMed facility much faster than they did with delivery vehicles. Matternet, who already enjoys an established reputation, has completed more than 3,000 flights for healthcare systems in Switzerland.

Earnings were also lower from the year-ago quarter’s $3.72 per share.Furthermore, the company slashed its full-year 2019 earnings guidance to a range of $15.10 and $15.90 per share, compared with analysts’ forecast of $15.97 (based on Refinitiv data). According to Graf , FedEx has embarked upon a voluntary employee buyout program to tackle the pressure from slowing international business.

Citi analyst Christian Wetherbee mentioned “slower International trends and ongoing profit headwinds from the TNT integration, as well as somewhat lower profit growth at Freight” as factors behind the target cut.FedEx acquired TNT for $4.8 billion in 2016. Wetherbee also pared down his estimate for FedEx's  third quarter earnings to $3.05 per share, well below the Street consensus of $3.28 per share.

FedEx is portending global trade tensions and a slowing of economic growth to dampen its business in 2019. Lowering its profit projection for the full fiscal year (ending May 30) by 7-10%, the courier delivery services company said that its international business especially in Europe faltered over the last three months.Job cuts are expected to reduce the company’s costs by $225 million to $275 million per year. The company hopes that the buyouts would boost productivity, as indicated by CEO Fred Smith in a call with investors (as reported by CNN). However, the company’s recent performance has been quite strong.

Parcel delivery company United Parcel Service (NYSE: UPS) is currently in one of its busiest times of the year.During the holiday season, the company sees a big boost to package traffic due to the increase in sales from retailers and individuals shipping packages to their loved ones.

FedEx will be hiking rates by an average 4.9% as of January 7, 2019. The courier delivery company had implemented a similar increase at the start of 2018.That means, there is a burgeoning volume that courier services have to meet and manage - something that could potentially increase total costs for courier firms, and therefore induce them to hike rates as a way to cushion their profitability.  Also, potential competition from e-commerce firm Amazon which is starting its own delivery business, could add further pressure on FedEx’s (or other delivery service firms') margins. Its competitor United Parcel Service might also increase rates by an average 5.9%, subject to government approval.  

FedEx (FDX, $ 217.42), the pioneers of the package tracking system and one of the largest delivery service providers across the globe, is set to lose $35.4 million as it reaches a settlement in the New York cigarette case. Alleged to have shipped some 80 million un-taxed cigarettes in New York city from 2006 to 2012, FedEx finally settled the case that was filed in 2014 after reaching an agreement in principle to settle with New York City and New York state by paying a sum of $35.4 million. The settlement doesn’t include any admission of liability by the FedEx Ground business, and is a drop in the bucket for a company that rakes in $65 billion in annual revenues. 

The U.S. added 157,000 jobs in July, marking the 94th straight month of job gains - the longest such streak in U.S. history.The Labor Department released the latest data on Friday.  Logging, couriers/messengers, temporary help services, employment services and other information services registered the largest employment gains. Unemployment rate fell below 4%, while average hourly pay for workers ticked up +2.7% on a year-over-year basis in July.