Listen (or read the transcript) to your organization's or FedEx’s most recent earnings call and consider the following and respond to the profit margin question.
Have you ever listened to an earnings call?
I never have paid attention to an earnings call. I didn’t even know what it was until I read it on lesson plan.
What topics were included?
The topics were based from each president and CEO’s of FedEx Express, FedEx Ground, and FedEx Freight. Mickey Foster is the Vice President of Investor Relations and mostly talks about the First quarter earnings, statistical book, and how the presentation will be displayed.
Topics that were included in the Earning Call: Strong Financial and Operating Results, Marketing Review and Outlook, Corporation Economic Outlook, Express U.S. Domestic, Express International, Ground Growth, Freight Growth, Business Trends, Financial Review and Outlook , Ground Segment, Freight Segment, Express Segment, New Financial Reporting Structure, Geography as % of Revenue, Overview of TNT, Acquisition of TNT, Multi-Year Integration Process, Plan to Realize the synergies with TNT, Long Term Financial Goals, Strategic Questions (FEDEX, 2016).
Which were most helpful or insightful?
The most helpful was the corporation economic outlook. If I was an investor it would defiantly make me want to take share of profits from this company.
Was there a topic you wished were included or expanded upon?
I would exclude the Multi-year integration process, you know when you acquire any company and absorb it into your own it will take time for it to smooth in your philosophy of doing business.
There is likely a discussion of the Profit Margin results. Was there an increase or decrease in Profit Margin and by how many basis points?
Financial Review and Outlook VP and CFO Alan B. Graf; explain that the earnings per share in Q1FY17 were $2.65 compared to Q1FY16 $2.42. Operating Margin of 8.6% in Q1FY17 and 9.3 % Q1FY16. (FEDEX, 2016)
Explain what this implies, what is the driving force, and what actions would you recommend?
This implies that acquiring TNT it gave FEDEX a global presence as per their numbers they will have approximately 56,000 team members with 900 plus hubs, depots and office facilities. European road network connecting more than 40 countries through 19 road hubs and over 540 deports. (FEDEX, 2016)
Michael Glenn talks about the economic update and outlook, which I saw something very unique in his notes to the Investors. He says that the Holiday promotions and buying patterns have increasingly shifted which has resulted in heavy demand for package delivery on Mondays during the peak. The intensity for demand on Monday has accelerated in recent years, as more and more retail locations have started serving as fulfillment centers for e-commerce orders. We expect each of the four Mondays during the upcoming peak period to be among the busiest in our company's history. (FEDEX, 2016) If you factor that they are really looking into getting the most out of the holiday deliveries.
Were the analyst’s questions aggressive and challenging or supportive and respectful?
Chris Wetherbee – Citi said,” follow up on some of the longer-term opportunities with TNT as part of the business. When you think about the $750 million in annual synergy target exiting fiscal 2020, can you help us with some of the buckets Alan?” (FEDEX, 2016)
How well did management respond to the questions?
and Alan B. Graf responded with “ We’re in the process of validating the strategic business case that we used when we made the acquisition. (FEDEX, 2016)
What additional insights were you able to gain in regards to the company's financial health, forward guidance, and strategic financial decisions?
The company has a healthy financial future by acquiring already established delivery company with 200 countries that they didn’t have already.
Was there any information or perspective shared that a competitor could benefit from?
A competitor could use the following information about trying to get a level ground on the new acquisition and what type of business FEDEX is running through and what technology they will be using moving forward.
How will this additional information support your effectiveness within the organization?
Makes me want to see what else they are going to be going after such as competitors, or independent carriers in different countries.
References
FEDEX. (2016, 11 01). http://seekingalpha.com/article/4007467-fedexs. Retrieved from http://seekingalpha.com: http://seekingalpha.com/article/4007467-fedexs-fdx-ceo-frederick-smith-q1-2017-results-earnings-call-transcript?part=single
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