Ukraine War, High Holiday Season Results, Income

FedEx executives are due to address investors Thursday after a turbulent three months that included the shocking outbreak of the Russian-Ukrainian war.

The company will release its earnings report for its fiscal third quarter from December to February, and executives’ commentary will likely offer some insight into how they view the impact of war and a spike in fuel prices.

They are also expected to provide an update on the company’s performance over the holiday season and ongoing personnel issues related to the COVID-19 pandemic.

Planes at Memphis International Airport are de-iced before takeoff Thursday, Feb. 3, 2022.

In response to the war, the company previously announced service disruptions in Ukraine, Russia and Belarus, and added an updated statement to its website on Tuesday:

“We are deeply troubled by what is happening in Ukraine, and our thoughts and solidarity are with those affected by this ongoing violence.

“Our top priority is the safety of our team members and their families, and we are providing direct financial assistance to them and affected communities.

“We are temporarily suspending all Russian and Belarusian services until further notice. As previously reported, locations in Ukraine have been temporarily closed and inbound and outbound services to Ukraine have been temporarily suspended.”

Since the outbreak of war, FedEx has refused requests from The Commercial Appeal to make an executive available for interview. The company declined a further request on Tuesday, although a staff member wrote in an email that the earnings call would likely address the war and its implications.

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Ukraine is a small part of FedEx’s business, but the war could have a wider impact

In a company filing last year, FedEx said it employed about 565,000 people globally as of March 2021, 182 of whom worked in Ukraine.

The same report indicates that FedEx has 762 employees in Russia.

The report was written in such a way that the number of employees in Ukraine and Russia could exceed these figures.

Satish Jindel of ShipMatrix said FedEx had relatively few assets in the region directly affected by the war.

“Especially Ukraine, first of all, as part of the world for FedEx, that’s a very small part of their international business,” Jindel said.

“And then even if you put Ukraine and Russia together, it’s still very small.”

He said Ukraine’s biggest export was agricultural products and Russia’s biggest export was oil and related products. Neither type of product fits in the FedEx wheelhouse for transportation.

All of this means the war in Ukraine won’t have a big direct impact on FedEx, he said.

It’s a point shared by people like Jack Atkins, an analyst at Stephens Inc.

“While we are concerned about the potential for slower economic activity in Europe generally, we do not believe the company’s decision to suspend service to Ukraine, Russia and Belarus will itself a significant impact on results,” Atkins wrote in a research note.

“We note that the company implemented an additional surcharge on most of its Asia-Pacific flights on March 7 due to the impact the conflict in Ukraine is having on air cargo routing and capacity.”

But he said FedEx could warn investors of the wider impact of the war. “With inflation fears rising and concerns about the negative impact on consumer spending of rising fuel prices and the knock-on effects this could have on commercial/industrial activity, we would not be surprised if (FedEx) took a slightly more cautious tone about business, broader trends and its outlook for the (next fiscal quarter.)”

Todd C. Fowler, an analyst at KeyBanc Capital Markets, wrote much the same thing in a research note: that FedEx has relatively little exposure to Eastern Europe, but the larger global situation may have an impact on the company’s overall outlook. “We note that geopolitical tensions and rising fuel prices are relatively new developments, which merit close monitoring,” he wrote.

Analysts delve into staffing and the impact of COVID-19

FedEx executives had spoken at length last year about the company’s problems recruiting enough people to run the business, and the extra expense the company incurred to get packages to short-staffed areas.

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“While we believe the business has come through the final stages of the peak holiday season well, a slow start (of calendar year 2022) in January economically, due to a sharp increase in cases of COVID nationwide, likely weighed on results,” Atkins wrote.

“In addition, the company issued service announcements mid-quarter regarding staffing levels issues at its cargo airline due to crew members out with COVID and harsh weather conditions.

“Overall, we expect a choppy quarter, but we believe this is widely expected by investors.

“On a positive note, we believe the company has made solid progress in recruiting and retaining parcel handlers after the peak season,” he wrote, adding that this is key to eliminating big spend. additional costs linked to the lack of personnel that the company had warned about last time. year.

Fowler, the KeyBanc analyst, expressed similar views.

“In our view, the peak trends (from the last quarter) were generally favorable and concerns about weather and labor disruptions are ignored.”

How to listen to the results call

The results call is Thursday at 4:30 p.m.

Anyone wishing to listen to FedEx’s earnings call can register online at

Investigative reporter Daniel Connolly welcomes advice and comments from the public. Contact him at 529-5296,, or on Twitter at @danielconnolly.