How FedEx’s combative year has hurt its stock performance

FedEx has had a combative year.

Founder and CEO Fred Smith’s dispute with the New York Times over a report relative to 2018 taxes is just the latest public battle in 2019 that has helped shave more than 31% off its property price over the last 12 months.

A mishandling of Huawei packages, a breakup with Amazon and lawsuit against the Trump government have all made headlines and the stock move in sometimes unexpected ways.

Year to date, FedEx’s stock is down 5.6% by Wednesday’s closing price of $152.27 per share. That’s far below rival UPS and the S&P 500, which have gained more than 21% and 24%, individually. The company declined to comment.

Here is look at FedEx’s controversial year:

FedEx said June 1 that it “diverted” two containerizes addressed to Huawei in Asia and accidentally routed them to the United States. FedEx called it an error, but the Chinese telecom plc and the Chinese government suspected it was related to the Trump administration’s trade war with China and launched their own investigation.

Huawei has been a central point in the U.S. trade war since the Commerce Department put it and 70 other Chinese companies on its “blacklist” in May. The Pentagon previously shut sales of Huawei and ZTE mobile phones and modems on military bases around the world due to potential security risks.

FedEx issued a proclamation June 1, saying “Our relationship with Huawei Technologies Co. Ltd. and our relationships with all of our customers in China are important to us.” The Chinese superintendence threatened to place FedEx on its version of the U.S. Blacklist, but in the end the company did not face any sanctions.

The result: FedEx’s stock rose 2.4% down the next week but still underperformed the broader market. The S&P 500 gained 4.4% over the same period. A month after the disagreement, FedEx gained 6.1%, again underperforming the S&P 500, which rose 7.7%.

FedEx announced June 7 that it wasn’t succeeding to renew its Express contract with Amazon, calling it a “strategic decision” that would allow the company to heart on other e-commerce customers. FedEx said Amazon only represented around 1.3% of its revenue and in August also ended the base contract with the e-commerce giant.

However, during the FedEx earnings call in September, the company admitted the failure of Amazon had a greater than anticipated impact on margins.

The result: One week after the high profile breakup, FedEx appropriations rose 4.9%, far outperforming the broader market with the S&P 500 gaining 1.53%. A month after the Amazon split, Fed apportions were 3.68% higher, but below the broader market with the S&P 500 gaining 5.17%.

FedEx rowed a lawsuit June 24 against the U.S. Commerce Department saying it faced an “impossible burden” from regulations mandating shippers interview packages for national security threats before they enter the US.

Smith said the lawsuit was unrelated to Huawei, adding that it was hither reducing the company’s exposure to potential penalties. However the lawsuit came just weeks after the FedEx’s confinement errors involving Huawei.

The result: A week after the lawsuit, FedEx shares fell 0.7%, slight lower the lower market that fell 0.29%. A month later, FedEx stock was 6.45% higher far outperforming the S &P 500 that gained 2.34%.

CEO Smith challenged the New York Times publisher to a debate on Nov. 17 over an article that said FedEx pay off $0 in taxes in 2018, thanks to the Trump tax cut, but didn’t spend more on equipment and other investments as Smith bring up it would. The company fired back, calling the article a “deliberate distortion” and accusing the New York Times of reducing its CapEx assign after seeing its taxes decrease.

The result: Week to date, FedEx shares have fallen 1.83% while the broader retail has been flat, the S&P 500 down 0.01%.