Our ongoing coverage of Supply Chain risk reverberated with FedEx's disappointing earnings call. Is FedEx patient zero in the Supply Chain risk? We use Viewer and its Query Insights feature to perform sentiment analysis across sectors to identify 5 key takeaways from the FedEx results.
Our readers and users may recall our post discussing the Supply Chain risk to Retail, even in a strong demand environment. Yesterday, the Supply Chain spoke in the form of the FedEx (FDX) earnings call. The headlines told a clear story: FedEx stock -12% and a lower 4Q outlook. Not surprisingly, FedEx’s earnings call garnered a meager Amenity Score of 2 (vs 63 last quarter), both the lowest score and biggest drop in the Logistics sector this past quarter.
The downtick in Amenity Score and lower Q4 guidance are just the headlines, not where analysts truly differentiate themselves. What can we learn in the details? How does that connect with data points across the ecosystem, and what are the positive and/or negative implications for other companies? By leveraging the power and scale of Amenity Viewer’s text analytics, we were able to investigate these questions in minutes.
We used the Query Insights feature of Amenity Viewer to run our NLP model and identify mentions of softness in Europe across earnings calls globally. The highest number of negative mentions were from Sappi (SPPJY), a South African pulp and paper products company that was certainly not on my radar, and probably not on the radar of most U.S. investors. FedEx closed above $227 on November 15, the date of the Sappi call, and is now 29%lower.
We note on its last earnings call (November 1), XPO Logistics saw a drop in its Amenity Score to 28 from 59. But after digging deeper, we see the company was still positive on Europe, while leaving the trap door open for trade war impact:
XPO Logistics (11/1):
FedEx spent much time on the call discussing cost actions they would take to mitigate the international weakness. One of those items was CapEx:
CapEx for a Logistics company like FedEx is revenue for aircraft OEMs like Boeing and Airbus. Again, we went to Query Insights to see if other aircraft operators are discussing reducing capacity.
Here we highlight Query Insights results where sentiment around Capacity and Financial key drivers shows that Boeing and Airbus may not be alone, especially in Europe:
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This communication does not represent investment advice. Transcript text provided by S&P Global Market Intelligence.
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