Good Evening! On Tuesday, the stock market experienced a decline as investors awaited the testimony of Federal Reserve Chairman Jerome Powell and monitored possible challenges to the recent market upswing.
All three indices ended today in the red with the S&P 500, Dow Jones, and Nasdaq Composite falling by 0.47%, 0.72%, and 0.16%, respectively.
IN THE WORKS
FedEx (FDX) reported results for its fourth quarter that were better than anticipated, but the company issued a profit prediction for the next fiscal year that was on the low side. This was due to what FedEx characterized as persistent demand softness and input cost increases.
- Revenue: $21.9 Billion vs. $22.55 Billion Expected
- Earnings Per Share: $4.94 vs. $4.85 Expected
What else is happening? The corporation also disclosed that CFO Michael Lenz will be retiring on July 31, 2023. Mr. Lenz has been appointed as a senior advisor to facilitate a smooth transition until the end of the year, while FedEx undertakes the process of finding a suitable replacement.
What to expect going forward! In April, FedEx announced its DRIVE initiative, which aims to merge its various operating companies, including FedEx Express, FedEx Ground, and FedEx Services, into the Federal Express Corporation. This move is intended to streamline the company’s operations and present one cohesive identity under the FedEx name. According to FedEx, the implementation of DRIVE is expected to result in $4 billion in permanent cost reductions by 2025, once the transition is fully completed in June 2024.
Spotify (SPOT) reported signing a weekly podcast agreement with comedian Trevor Noah. This news comes shortly after the company’s announcement that it was ending its partnership with Prince Harry and Meghan Markle.
Spotify is not playing around. The company has recently made a strategic realignment of its podcast division, following a significant investment of $1 billion over the past four years to expand its presence in the podcast market. The spending had a notable impact on gross margins and had a substantial negative effect on profitability. In turn, the company experienced a significant decline in its stock value, with a decrease of 70% in 2022, which was met with disapproval from investors.
However! According to Bloomberg, Spotify is aiming to enhance its profit margins by introducing a more expensive premium subscription level that will offer higher-quality audio features and increased access to audiobooks. Investors have been pressuring the company to increase prices for its different plans, which has resulted in this development.