FedEx (NYSE:FDX) CEO Fred Smith said on Tuesday tax reform will boost the balance sheets of American businesses and stimulate investment in the United States.
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“It will allow us to put more money into the business with less risk,” Smith said during an exclusive interview with FOX Business’ Stuart Varney on “Varney & Co.”
Many companies, including Wal-Mart (NYSE:WMT), AT&T (NYSE:T) and Boeing (NYSE:BA), are giving back by raising pay and doling out employee bonuses, as a result of the tax bill. While Smith was unsure what the company will do with the extra profits, he said it will deliver nearly $1.5 billion worth of higher earnings.
“We have a board meeting next week. We tell our board what the tax bill means to us. It passed in between our board meetings and I’m sure we are going to be doing a lot of things as a result of this tax bill because it was very, very good policy,” he said.
The company anticipates spending $5.9 billion on capital expenditure (capex) in 2018, and only expects that number to increase as a result of the tax legislation.
“It means that the risk of investment is lower and almost certainly American business, including FedEx, will respond to it with higher investment,” Smith said.
The courier delivers about 13 million shipments per day, according to Smith, who expects to “easily deliver 15 million a day,” as a result of increased investment capacity created by the bill.