FedEx this morning released its results for the past quarter. Among other things, it said profits were up 3 percent, while earnings rose from $479 million a year ago to $493 million in the past three months. So, how did management respond to the news?
"The expectations that economic conditions will remain very difficult through calendar year 2009, we are taking additional actions necessary to help offset weak demand, protect our business and minimize the loss of jobs," said CEO Frederick Smith, who himself is taking a 20 percent cut in pay. The package carrier is putting a freeze on hiring, suspending company matching contributions of 401(k) plans, and many other steps to reduce expenses by $200 million in the current fiscal year and $600 million in 2010. The report also says the company is "evaluating other measures should business conditions further deteriorate."
It is amazing how quickly the mood in this country has shifted from cautious to crisis.
However, consumers are not nearly as freaked as corporations. A new survey out this morning from IDC found that two-thirds of holiday shoppers plan to spend as much or more on gifts this year for friends and family. "Consumers are shifting to staying, or nesting, at home more," said Randy Gisusto, who prepared the report. Consumer electronics, he says, will be a winner from this change. Almost 50 percent of consumers plan to buy some type of consumer electronics item for their homes before the end of the year. Also, 35 percent of the people who went shopping on Black Friday after Thanksgiving say they bought something for themselves.
Speaking of the holidays, another report says that if Santa Claus eats one cookie for every child in America he will gain more than 3.7 million pounds in just one night. Dr. John Tantillo suggests households replace the traditional cookies with carrot sticks and celery. If they did that, Jolly Ole St. Nick would actually lose some weight. He also says the image of Santa needs to be changed to reflect a more svelte, physically fit person. For his efforts, I give Dr. Tantillo the Whiner of the Week award.
Rosalyn Hochberg had the honor of ringing the opening bell at the NYSE this morning. She is retiring after 33 year of service as the official nurse at the Exchange. There's a million punch lines to this story so I'll let you all supply your own.