Welcome back, investors, to Breakfast with the Fool. Coffee's perking -- we're trying out a new breakfast blend this morning, so tell us how you like it. We're also cutting back on pricey pastries, and switching to cold cereal this morning in sympathy with ...
FedEx (NYSE: FDX )
FedEx this morning reported a 75% decline in third-quarter profit as demand for its services tumbled. Although the company claimed growing market share in its transportation segments, it's the old case of a "bigger slice of a smaller pie." Even the lower cost of fuel oil wasn't enough to salvage the quarter, and FedEx warned that it will be implementing further layoffs and other cost-cutting measures in an effort to save $1 billion next fiscal year. Thus, FedEx joins a long and lengthening line of pink-slip-Polly-un-Annas -- Caterpillar (NYSE: CAT ) , Nokia (NYSE: NOK ) , Baker Hughes (NYSE: BHI ) , and United Technologies (NYSE: UTX ) all announced layoffs of their own this week.
So I guess it's true what they say about FedEx, folks -- it is an economic bellwether.
The employee has no clothes
Not coincidentally, I suspect, over at Citibank, they just cut earnings estimates for Cintas (Nasdaq: CTAS ) , which supplies employee uniforms. Fewer workers means less need for uniforms to clothe 'em, of course, and Citibank believes Cintas' business "is likely to deteriorate due to the impact of macroeconomic conditions." Logical.
Meanwhile in France ...
... where laying off workers is harder than the pastries on sale at Jacques' Discount Croissant-eria, workers launched a nationwide strike. More than 200 protest marches were anticipated across the country, demanding that President Nicolas Sarkozy expand his nation's stimulus program. The strikes disrupted rail and air traffic, and handed kids an unplanned holiday, as nearly one-third of the nation's school teachers played hooky. So let's hear it for job security.
Least but not last
Not everyone is feeling blue about the economy. Cisco's (Nasdaq: CSCO ) laying down some serious green to expand its entry into the consumer electronics sector. The "maker of the Internet backbone" on Thursday announced its acquisition of Pure Digital Technologies, maker of the Flip Video camcorder, for the low, low price of roughly $590 million in stock. Like Warren Buffett always says -- the time to buy is when everybody else is selling.
Last but not least
Let's come full circle. We began this column with a note on how low oil prices failed to salvage FedEx's quarterly earnings, because those low oil prices owed to a weak economy. But could price strength in oil perversely bode well for FedEx -- and the economy?
Early indications show black gold moving past the $51 mark this morning. Is oil taking a cue from Fed Chairman Ben Bernanke's promise of an economic recovery later this year, as a recovery would logically improve demand for the commodity? A Fool can hope.
And on that optimistic note, I'll bid you adieu till we next break the fast. Fool on!