FedEx tumbles 9% after slashing profit forecast, citing trade war and recession fears
- Shares of FedEx plunged as much as 9% in after-hours trading on Tuesday after the company missed earnings expectations for the fiscal first quarter and lowered its profit guidance for 2020.
- FedEx CEO Frederick Smith said a "weakening global macro environment driven by increasing trade tensions" negatively impacted the company's results.
- The company expects its full-year earnings per share to fall between $11 and $13, falling below analyst estimates of $14.73.
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Shares of FedEx plummeted on Tuesday after the logistics company cut its full-year profit forecasts, citing trade tensions and recession fears.
Here are the key numbers from FedEx's earnings report:
- Revenue: $17.05 billion, versus $17.06 billion predicted by analysts
- Earning per share: $3.05, compared to $3.15 expected by analysts
- Full-year EPS guidance: Between $11 and $13, compared to $14.73 estimated by analysts.
"Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty," CEO Frederick Smith said in an earnings release.
The company said its fiscal first-quarter performance declined mainly due to deteriorating macroeconomic conditions, rising costs to expand service offerings, and a greater shift toward lower-yielding services.
FedEx CFO Alan Graf said the company is pursuing additional cost-cutting measures to buffer the impact of macro uncertainty including post-peak reductions within its Express air network to improve matching capacity with demand.
Shares of FedEx were up 7% year-to-date through Tuesday's close.
