Company Watch - FedEx.
FedEx unveils profitability improvement initiativeE. FedEx said it is seeking $1.7 billion in annual profitability improvement by 2016 and indicated that cuts and changes to its air-intensive FedEx Express unit will be central to achieving the earnings increase. FedExOs net profit for its 2012 fiscalfirst quarter ended Aug. 31 was down 1% year-over-year to $459 million, a rare earnings decrease for the company. Net income for its 2011 fiscal year ended May 31 was $2.03 billion, suggesting the company is targeting around $3.7 billion in net income for its 2015 fiscal year ending May 31, 2016. Chairman, president and CEO Frederick Smith said, OWe are revamping the Express cost structure through a combination of cost reductions, efficiency improvements and service repositioning.O Improved information technology will also help increase cost-efficiency, he added. OOur overall strategy is closely tied to effective yield management,O he said in a speech to FedEx investors. OThe key is striking the right balance between volume growth and yield improvements. With slow economic growth, however, the cost reduction programs E are also essential to achieve our financial goals.O He expressed confidence FedEx could meet its profit targets Oeven in low-growth environments for global trade and within the major economies.O Smith said FedEx would reduce its workforce Oby several thousand peopleO via a voluntary buyout program. Oct 10, 2012
FedEx announces plan for $1.7B in cost cuts. FedEx has announced its new cost-cutting plan, which is aiming for what CEO Fred Smith called $1.7 billion in "profitability improvement" over the next three years. The measures focus on restructuring the company's express air fleet through modernization and possibly offering voluntary buyouts for some employees. Oct 10, 2012
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