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FedEx gets more selective about shipments, profit rises

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© Reuters. A FedEx worker delivers packages in Manhattan, New York City, U.S., May 9, 2022. REUTERS/Andrew Kelly

LOS ANGELES (Reuters) -FedEx Corp reported higher quarterly earnings and issued a stronger-than-expected full-year forecast on Thursday, after it cherry-picked profit-boosting deliveries amid softening global demand for shipping.

FedEx (NYSE:FDX)’s closely-watched Ground unit margin improved from the prior quarter, helping to send shares of the Memphis-based company up 2% to $232.75 in extended trading. That operation handles the bulk of its e-commerce home deliveries and drives the company’s growth. But it performance has lagged that of rival United Parcel Service (NYSE:UPS), whose new chief executive adopted a “better not bigger” mantra two years ago.

Investors are pressuring new FedEx Chief Executive Raj Subramaniam to improve service and squeeze more profits from the company’s sprawling and independently operated Ground, Express and Freight segments. Subramaniam succeeded founder Fred Smith at the helm of the 50-year-old firm on June 1.

Ground margins improved to 10% from 7.3% in the third quarter, after executives increased fuel surcharges, culled unattractive shipments and saw profit-sapping labor costs begin to stabilize. Revenue per package jumped 11%.

Executives said they expect elevated shipping prices to stick, even as inflation, pandemic and geopolitical risks weigh on business activity around the world.

On Ground rates, Subramaniam said: “We are essentially critical infrastructure for e-commerce.”

Adjusted net income for the fiscal fourth quarter ended May 31 jumped 32% to $1.8 billion, or $6.87 per share, from a year earlier. Revenue grew 8% $24.4 billion.

Per-share earnings beat analysts’ estimate by a penny, according to Refinitiv I/B/E/S Estimates, while revenue slightly missed analysts’ target of $24.56 billion.

The company issued a full-year forecast for earnings per share of $22.50 to $24.50 excluding items – above analysts’ average estimate of $22.14 per share, according to Refinitiv I/B/E/S Estimates.

Last week, FedEx expanded its board under a cooperation agreement with activist investor D.E. Shaw Group, which has a 1% stake in the company.

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Oklahoma reaches $250 million opioid settlement with drug distributors

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© Reuters.

(Reuters) – Oklahoma Attorney General John O’Connor said on Monday his state reached a $250 million settlement with Amerisource Bergen Corp, Cardinal Health Inc (NYSE:CAH) and McKesson Corp (NYSE:MCK) to resolve allegations the drug distributors contributed to the opioid epidemic in the state.

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JPMorgan Chase Maintains Dividend After Stress Test

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© Reuters. JPMorgan Chase Maintains Dividend After Stress Test

By Davit Kirakosyan

JPMorgan Chase & Co. (NYSE:JPM) maintained its dividend after it completed the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review (CCAR) stress test process.

In light of higher future capital requirements, the company’s Board of Directors plans to maintain the current quarterly common stock dividend of $1.00 per share for Q3/22.

Jamie Dimon, Chairman and CEO of JPMorgan Chase said: “The Federal Reserve’s 2022 CCAR stress test once again shows that banks are able to be a source of strength for the broader economy while withstanding extreme market shocks. We continue to maintain a fortress balance sheet including robust governance and controls, strong revenue growth and profit margins, and we remain committed to serving our clients and customers. We will continue to use our capital to invest in and grow our market-leading businesses, pay a sustainable dividend, and we will retain capital to fully satisfy our future regulatory requirements.”

The Fed is expected to provide the company with its final Stress Capital Buffer (SCB) requirement by August 31, and that requirement will become effective on October 1 and remain in effect until September 30.

The company’s indicative SCB requirement is 4% (up from the current 3.2%) and the standardized Common Equity Tier 1 capital ratio requirement including regulatory buffers is 12% (up from the current 11.2%).

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Bank of America Completes Fed’s 2022 Stress Test, to Increase Quarterly Dividend by 5%

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© Reuters. Bank of America (BAC) Completes Fed’s 2022 Stress Test, to Increase Quarterly Dividend by 5%

By Davit Kirakosyan

Bank of America Corporation (NYSE:BAC) completed the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review (CCAR) and announced plans to increase its quarterly common stock dividend by 5% to $0.22 per share, beginning Q3/22.

Based on the 2022 CCAR results, the company’s stress capital buffer (SCB), effective from October 1, 2022, to September 30, 2023, when finalized, will be approximately 100 bps higher than the current 2.5% level and will therefore add approximately 100 bps to the CET1 minimum requirement of 9.5%.

According to Alastair Borthwick, the CFO of the company, the 2022 stress test results once again support that the company maintains a strong capital position to serve its customers and clients through the current economic environment and is well prepared for a severe economic stress scenario.

In October 2021, Bank of America renewed the previously announced $25 billion common stock purchase program with $17 billion remaining as of March 31, 2022.

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