FedEx reported a strong fourth-quarter profit

FedEx reported a strong fourth-quarter profit Wednesday despite fuel and economic challenges and forecast robust 2012 earnings, sending its shares up 3 percent in premarket trading.

"Our actions to improve yields continue to drive revenue and earnings growth across our transportation segments," said Alan B. Graf, FedEX chief financial officer. "Even with higher planned capital spending in fiscal 2012, margins, cash flows and returns are expected to improve year over year."

The No. 2 package delivery company has been able to pass through higher costs via fuel surcharges and still has room to raise prices without major push-back from consumers, most analysts said.

Net profit rose 33 percent to $558 million, or $1.75 per share in the quarter that ended May 31, from $419 million, or $1.33 per share a year ago.

Analysts, on average, forecast a $1.72 per share profit, according to Thomson Reuters. It was not immediately clear if the two numbers were directly comparable FedEx forecasts fiscal 2012 profit rising to $6.35 to $6.85 per share.

That forecast is based on the current market outlook for fuel prices and continued moderate global economic growth. FedEx said it plans to spend $4.2 billion in fiscal 2012, which includes the delivery of aircraft, payments toward future aircraft deliveries and investments in facilities, vehicles and technology.

Capital spending in fiscal 2011 was $3.4 billion, of which $2 billion was for aircraft and related equipment. The company has been upgrading its fleet to more fuel efficient aircraft.

Fourth-quarter revenue rose 12 percent to $10.55 billion from $9.43 billion a year ago, Memphis, Tennessee-based FedEx said on Wednesday. Wall Street analysts expected $10.4 billion in revenue, on average, according to Thomson Reuters.

Adjusted earnings were $4.90 per share in 2011, up from $3.76 a year ago and directly in line with the consensus forecast.

Source CNBC.COM

World No one retailer Wal-Mart lost Rob Cissell

World No one retailer Wal-Mart lost Rob Cissell, its chief operating officer in China and Roland Lawrence its chief financial officer in the country. The management turmoil again accentuated as Shawn Gray its vice president of operations resigned for so called personal reasons.

Wal-Mart operates 333 outlets and generates $7.5 billion revenue in China, but in last three year market share has reduced to 5.5% from 8 %, because it has not reacted proactively to key trends. 

Wal-Mart requires a new strategy because it faces increasing headwinds as new sales channels like e-commerce; increasing real estate and labors costs; and transforming consumer habits in the Chinese retail landscape.

Wal-Mart have committed the blunder of betting too heavily on the big box retailer format as they are doing  in the U.S.,rather than smaller,conveniently located retail outlets which is more preferred in China this  is the same mistake that Home Depot and Best Buy had committed and led them ultimately retreated from the market. 

China may have high compound annual revenue growth rates, but traffic and the lack of free parking means consumers often prefer to shop in neighborhood stores.

The government restriction on free plastic shopping bags has also affected the consumers shopping behavior, and the habit of buying less each time, further decreased the foot fall of stores away to home. 

Consumers habit to buy costly products such as imported blue berries and meats in high-end organic and fruit stores opened by individuals,while going to Wal-Mart to shop up on low-margin products such as toothpaste, detergent. People like to buy fruit from high-end stores because it’s fresher than Wal-Mart they don’t want to pay for parking at Wal-Mart.

Wal-Mart had struggled with consumer perception and their branding.They espouse the 'everyday low price' concept, yet are positioned relatively high in the market when compared to street vendors who sold their product truly on low price.

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BPSC Mains Topic-MGNREGA

MGNREGA, Contributing Towards Inclusive Growth

After identifying the much needed step to combat the serious problem of wide spread unemployment in the country, the National Rural Employment Guarantee Act (NREGA) was enacted on 7, September, 2005 by the central government. NREGA, renamed as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), provides for the enhancement of livelihood security of the households in rural areas of the country by providing at least 100 days of guaranteed wage employment in every year to each household whose adult members volunteer to do unskilled manual work.

MNREGA made the Government legally accountable for providing employment to those who ask for it and thereby goes beyond providing a social safety net towards guaranteeing the Right to Employment. The most significant feature of this Act is that if a worker who has applied for work under MNREGA is not provided employment within 15 days from the date on which work is requested, an unemployment allowance shall be payable by the State Government at the rate prescribed in the Act. The Scheme is working as a social safety net. It has prevented distress migration and helped in empowerment of women.

The employment availability and wage rates have made a significant impact on the inhabitants of rural areas. Wages for rural households under the MGNREGA have increased in Maharashtra from Rs. 47 to Rs. 72, in Uttar Pradesh from Rs. 58 to Rs. 100, in Bihar from Rs. 68 to Rs. 100, in West Bengal from Rs. 64 to Rs. 100, in Madhya Pradesh from Rs. 58 to Rs. 100 in Jammu & Kashmir from Rs. 45 to Rs. 100 and in Chhattisgarh from Rs. 58 to Rs. 100 to name a few states. At the national level, the average wages paid under the MGNREGA have increased from Rs. 75 in 2007-08 to Rs. 93 in 2009-10.

Increase in wage rate and number of workdays in rural areas has increased the income of rural households. Increase in income has resulted in increase in ability of rural households to purchase food grains, other essential commodities, and to access education and health care.

About 46 lakh works have been taken up during 2009-10 and most of these (67%) relate to water conservation. This has resulted in rise in water table in dry and arid regions as large number of water conservation and drought proofing works have been taken up under the MGNREGA.

More than 9 crore saving bank accounts in the Banks and Post Offices have been opened for the MGNREGA workers under the financial inclusion program.

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