FedEx (NYSE:FDX) recently reported strong growth for its third quarter, but investors shouldn't necessarily jump aboard just yet.

In this segment from the Motley Fool Money podcast, Simon Erickson discusses how the company performed during the quarter, then identifies a major long-term concern dampening his enthusiasm for the stock.

A full transcript follows the video.

This podcast was recorded on March 18, 2016. 

Chris Hill: FedEx on the rise after strong third-quarter results. A bunch of divisions -- their ground division really putting up some nice revenue growth.

Simon Erickson: Well, Chris, it's important to see which of these divisions are really accelerating within FedEx.

Hill: (laughs) Well done.

Erickson: (laughs) The one that really stands out to me is actually the express division, saw operating income up 51% in that group. Ground transport, meanwhile, was down 4%. So, I think we're in a world now, of two-day shipping. A lot of that's due to Amazon (NASDAQ:AMZN) and the Amazon Prime subscription and stuff like that. And that's been really good for FedEx in the shorter term, and we've seen that in this quarterly report.

But still, for me, I'm a little bit hesitant on this, because Amazon is also aggressively building out their own logistics infrastructure. We've seen that with Prime Now, which ships in some locations for $8 for one-hour delivery now, or free for two-hour. It's going to be interesting to see, how is that going to compare with something like FedEx, which has traditionally relied on ground shipping. Now, they're getting more into express shipping, but are they going to be able to compete against a company like Amazon?

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