FedEx Corp. shares plummeted more than 5% in aftermarket trading on Thursday due to reduced full-year guidance for the third consecutive quarter. The integrated parcel giant cited intensifying macroeconomic headwinds and uncertainty in the US industrial economy as primary factors.
The company lowered its revenue forecast, expecting it to be flat or slightly down year-over-year, compared to a previous outlook of flat revenue. It also adjusted its earnings per share estimate, narrowing the range from $19-$20 per share to $18-$18.60 per share.
Economic uncertainty is particularly concerning for FedEx, with the rapid escalation of tariffs and tariff threats from the US potentially impacting consumer demand and import prices. This has led to a decrease in deferred package volume and a decline in priority express volume.
In contrast, international economy package volume increased 48% in the third quarter, driven by growth in e-commerce. However, this was offset by decreases in international priority package volume.
The company attributed its improved profitability to the success of the Drive network transformation, higher pricing, and increased volume at FedEx Express. Despite losing a domestic air cargo contract with the US Postal Service, FedEx Express generated a 17% gain in adjusted operating income.
On the other hand, FedEx Freight’s operating results were negatively impacted by lower fuel prices, resulting in reduced yields, weight per shipment, and fewer shipments due to slower global industrial production.
Source: https://finance.yahoo.com/news/fedex-says-economic-uncertainty-slowing-235848286.html