FedEx (FDX, Financial) – Global logistics company FedEx was another top detractor in the quarterafter a large earnings miss, driven by its overseas express business. The decline in Asia was primarily macro driven, while the European miss was a combination of macro and service quality issues related to the TNT integration. Management is cutting costs and taking steps to address the service issues. To the positive, the US Ground and Freight businesses reported solid earnings growth. These domestic businesses alone are generating almost $15 per share in free cash flow power and are worth $240, significantly more than FedEx’s share price today. In early October, the company announced an acceleration of its previously announced share repurchase program, a strong vote of confidence from management.
From Mason Hawkins (Trades, Portfolio)' Longleaf Partners Fund third-quarter 2022 commentary.
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