FedEx FY 4Q17 Earnings Call Notes

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Frederick Smith – Chairman & CEO

Amazon is a great company, but there’s way too much focus on that

“I mean, Amazon is a fantastic company, and it delivers things to all of us. And there is — we deliver a lot of things that are ordered over the Amazon website. We move things for Amazon and so forth, but there is far too much focus on that as opposed to the larger part of FedEx’ business. ”

Rajesh Subramaniam

Moderate growth in the global economy

“We see moderate growth in the global economy. We expect U.S. GDP growth of 2.2% in calendar year ’17 and 2.5% in calendar year ’18. Consumer spending is solid. Investment and trade are rebounding, and measures of business confidence remain high. We see industrial production growth of 1.9% this year and 2.5% next year. For the global economy, we forecast GDP growth of 2.7% for calendar year ’17 and 2.8% for calendar year ’18.”

Continue to experience growth in demand for large, heavy packages

“”We also continue to experience growth in demand for large, heavy package delivery as a growing array of items are now being sold online. Furniture, mattresses, sports and exercise equipment are increasingly moving to the FedEx Ground network for residential delivery. This trend has accelerated over the past 12 months, and we have made adjustments to facilities and investments in sortation technology that enable outstanding service for these larger packages. We’re continuing to analyze pricing and surcharges for oversized packages to ensure that we have appropriate pricing for the service provided.”

Alan Graf

Seen wage and benefit increases offset by automation

We have a great balance between wage and benefit increases offset by productivity gains resulting from investments in IT and automation and volume increases. So not an issue for us at the moment.

Robert Carter

We see applications for blockchain

Well, in addition to finance, we see broad applicability of block chain to handle things like identity management, authenticity, pedigree and custody. So we’re deeply engaged in block-chain technologies, understanding their implications for custodial control and for many of the things that we do. It’s an exciting set of breakthroughs in technology, and we’re staying very close to the leading edge of that.