FedEx 1Q profit doubles; boosts next qtr outlook, & is cutting 1,700 jobs

[allbusinessjoe]

Month after month we get to read story after story about profitible companies cutting jobs. News stories such as this one speak VOLUMES to the arguement of whether or not the bush tax cuts should be allowed to expire.


FedEx 1Q profit doubles; boosts next qtr outlook, & is cutting 1,700 jobs

FedEx 1Q profit doubles; will cut 1,700 jobs - Yahoo! Finance

Companies:FedEx Corporation Topics:Earnings
On Thursday September 16, 2010, 7:46 am
NEW YORK (AP) -- FedEx says its fiscal first-quarter earnings doubled and the company will cut 1,700 jobs as it consolidates its trucking operations to save money.

The company is also boosting its quarterly per share outlook to between $1.15 and $1.35, from $1.05 to $1.25.

The Memphis, Tenn., company earned $380 million, or $1.20 per share, compared with $181 million, or 58 cents per share a year ago.

Revenue rose 18 percent to $9.46 billion.

FedEx will combine its FedEx Freight and FedEx National LTL operations on Jan. 30, closing 100 facilities and cutting 1,700 workers. FedEx Corp. says the move, along with other cost cuts, will ensure it's profitable next year.

FedEx shares fell $2.27, or 2.6 percent, to $83.67 in pre-market trading.

 

[vintageJIM]

it's ALL ABOUT the bottom line, profit, etc.

the employee is expendable; that has been proven time & time again by the policies of the corporate elites over the last four to five decades

but after all it's the land of the free & when you lose your job, you're free ................

 

[Scooter2112]

News stories such as this one speak VOLUMES to the arguement of whether or not the bush tax cuts should be allowed to expire.

Explain....

 

[allbusinessjoe]

Explain....

Well, examine you thoughts about what the bush tax cuts were designed to do. Now look at how those cuts work in reality.

For most people with any quesetion about the effectiveness and whether or not the (unfunded) tax cuts should expire --- this article should hit them like a speeding bus.

 

[KSG_Standard]

WTF does Fed Ex have to do with the Bush tax cuts? The tax cuts were on PERSONAL income taxes and went to EVERY SINGLE AMERICAN TAXPAYER...there were NO tax cuts to corporations, FED Ex is a Delaware Corporation.

The United States has the second highest corporate tax rates in the world and with Japan's proposed changes the US will have the highest corporate tax rates...we currently have a corporate tax rate over 35% at the federal level, and we also have corporate taxes in many states....these rates don't include property taxes, taxes on capital equipment/expenses, sales tax and personal income taxes on the corporate employees.

Businesses are NOT in business to provide jobs, they exist to maximize profits and to be as efficient as possible.

 

[Scooter2112]

My thoughts are that they kept unemployment low, while allowing people to keep more of the money that they earned. Even for those who were unqualified to buy the houses that they bought. Foreclosures would have been even more severe within a higher tax structure in light of Congress not interested in reforming lending laws.

What I see now, is profitable businesses cutting overhead in anticipation of income tax increases that are, at this point, on schedule to happen. Downsizing in order to survive on reduced margins.

The timing of the cuts are very revealing.

 

[kernelofwisdom]

For people who trade stocks around for a living, 15% capital gains is sweet. probably too sweet compared to the guy working for a living making good money but paying over 30% in federal taxes.

The perception though that you don't any taxes if you make money is wrong, unless you are in the capital gains stratosphere.

In our company for instance, we get paid a reasonable salary for our jobs. If the company ends up with a profit, which is challenging in this economy and with the need to maintain reserves, the government takes 40% and then with NC tax another 20% is taken (federal and state dividend tax) from the remaining 60%. So over half of any money you make goes straight to the government. You may think that's not enough, but it certainly is not nothing. That's the reality for mid size businesses who do not have off shore holding companies to charge in cost and reduce reportable profit.

 

[KSG_Standard]

It's outrageously outrageous that Americans would want to keep the money that they earned with the sweat of the own brows and the ideas, efforts and risk that they took on themselves, instead of giving the money to the Federal gov't to be wasted.

What we need is a bigger, more powerful federal government to take care of all of our needs and to make sure that we never have to be responsible for ourselves. More government is always best, higher taxes are always better...why can't everyone see this?

Currently, about 40% of Americans pay almost all federal income taxes...Income taxes are applied ONLY to ordinary income, the uber-rich don't pay income taxes...they pay capital gains taxes instead. George Soros, Bill Gates, John Kerry, the Rockefellers, the Clintons, algore, Warren Buffet and all the others of their strata don't give a rip about income taxes as they are unaffected by them.

We need to tax the people who are trying to get rich...we need to prevent them from getting rich. Earning a big paycheck is evil.

 

[kernelofwisdom]

It's a good point KSG. A solid salary is not the same as being rich. It may be being used to pay student loans or the high cost of living in some area. It may be saved. But it doesn't equal rich.

If the dividend rate goes to close to 40%, then the company's income is taxed 40% before owners get it, and then taxed another 40%. What's the point? A foreign company that could play the shell game and experience much lower taxes can make an attractive offer and boom ownership goes overseas.

With all the problems with the tax code etc. is 40% + 40% taxation against middle class business owners really going to help the economy, or is it more to punish them based on the stories about high-flying wall street guys?

 

[kmk108]

Corporations exist to make money. Employees exist to make the corporations money. Businesses are nice to customers because they make money off the customers. The business world's main goal is simple: MAKE MONEY AND SURVIVE. Nothing else.

 

[LoKi]

Our government doesn't seem to want businesses to thrive here. I predict that by the time my kids grow up over 80% of people will be 'government employees'. The rest will be fugitives.

 

[Lyrica]

Corporations exist to make money. Employees exist to make the corporations money. Businesses are nice to customers because they make money off the customers. The business world's main goal is simple: MAKE MONEY AND SURVIVE. Nothing else.

and you don't see anything wrong with that?

 

[KSG_Standard]

It's also quite ridiculous to think that the Obama administration is worried about the debt or deficit after spending over $2.3 trillion in 20 months. They want to tax the high income earners to pay down the debt, while they print/borrow money faster than ANY administration in history for boondoggles and their special interests. Please...

A better set of solutions IMHO, would be to cut corporate income taxes to near zero or to eliminate them all together. Destroy the current tax code. Treat ALL income as ordinary income, get rid of ALL loopholes and deductions other than a standard deduction. Have 2 tax rates, 10% on ALL earnings from $39k-$100k and 25% on ALL earnings from $100k and up. Institute a consumption or sales tax and EVERYBODY pays. Stop the class warfare, stop chasing businesses overseas and make EVERYBODY put some skin in the game.

 

[kmk108]

and you don't see anything wrong with that?

No. The people who run corporations are doing their job just like everyone else. The point of a business is to maximize profits so that more money can be made. Some businesses going above and beyond to cater to their customers and employees. You have to find a balance between making as much money possible and keeping everyone happy. The ones that value keeping everyone happy more than money won't ultimately survive in the business world.

 

[kmk108]

A better set of solutions IMHO, would be to cut corporate income taxes to near zero or to eliminate them all together. Destroy the current tax code. Treat ALL income as ordinary income, get rid of ALL loopholes and deductions other than a standard deduction. Have 2 tax rates, 10% on ALL earnings from $39k-$100k and 25% on ALL earnings from $100k and up. Institute a consumption or sales tax and EVERYBODY pays. Stop the class warfare, stop chasing businesses overseas and make EVERYBODY put some skin in the game.

But taxing the rich is the only right thing to do

 

[kernelofwisdom]

It's also quite ridiculous to think that the Obama administration is worried about the debt or deficit after spending over $2.3 trillion in 20 months. They want to tax the high income earners to pay down the debt, while they print/borrow money faster than ANY administration in history for boondoggles and their special interests. Please...

A better set of solutions IMHO, would be to cut corporate income taxes to near zero or to eliminate them all together. Destroy the current tax code. Treat ALL income as ordinary income, get rid of ALL loopholes and deductions other than a standard deduction. Have 2 tax rates, 10% on ALL earnings from $39k-$100k and 25% on ALL earnings from $100k and up. Institute a consumption or sales tax and EVERYBODY pays. Stop the class warfare, stop chasing businesses overseas and make EVERYBODY put some skin in the game.

I like this. Perhaps tweaking the percentages, but treating some kinds of mega-income as special while creating this or that special bracket with this or that special incentive is BS.

 

[jeff_farkas]

But taxing the rich is the only right thing to do

How much do you make?? My average income was about 50K. The top 2% did well under the Clinton tax rates why can't they do as well now with the same rates??

 

[Lyrica]

No. The people who run corporations are doing their job just like everyone else. The point of a business is to maximize profits so that more money can be made. Some businesses going above and beyond to cater to their customers and employees. You have to find a balance between making as much money possible and keeping everyone happy. The ones that value keeping everyone happy more than money won't ultimately survive in the business world.

but when profit and the bottom line is the only motivating factor, those things go out the window. the love of money is the root of all evil in my opinion and those who's only goal is to make money are not nice people. and we could do with a lot more nice people in the world. or hasn't anyone else noticed that it's going to shit?

 

[kmk108]

How much do you make?? My average income was about 50K. The top 2% did well under the Clinton tax rates why can't they do as well now with the same rates??

I don't make any money. I get money from my parents while I go to school.

I'm just saying that taxing the rich heavily while taxing the poorer less is, in my mind, wrong. Why do you want to punish someone because they make more money?

 

[Scooter2112]

I like this. Perhaps tweaking the percentages, but treating some kinds of mega-income as special while creating this or that special bracket with this or that special incentive is BS.

That would be great....and much more efficient.

But it looks like Obama is shoring up the role of the IRS with the Obamacare oversight. Full out class warfare at the Federal level.

This guy and most of Congress need to go.