FedEx issues major earnings warning as global volumes drop

FedEx issues major earnings warning as global volumes drop

By Investing.com Staff

FedEx Corporation (NYSE) warned in the first quarter and pulled its guidance for the year, sending the stock down 11% in after-hours.

The delivery giant said it expects $3.44 in non-GAAP first-quarter profit, down from $4.37 last year, and well below the consensus of $5.14.

The company said the results were negatively affected by the global volume that accelerated in the final weeks of the quarter.

FedEx Express results were particularly affected by macroeconomic weakness in Asia and service challenges in Europe, resulting in a revenue shortfall in the segment of about $500 million compared to the company’s expectations. FedEx Ground revenue was less than the company’s forecast of about $300 million.

Raj Subramaniam, FedEx, said: β€œGlobal volumes declined as macroeconomic trends deteriorated significantly later in the quarter, both internationally and in the US. We are quickly dealing with these headwinds, but given the speed with which conditions are changing, the First-quarter results are below our expectations. Foundation President and CEO. β€œWhile this performance is disappointing, we are aggressively accelerating cost-cutting efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are in line with the strategy we outlined in June, and I remain confident of achieving our financial targets. for fiscal year 2025″.

As a result of preliminary first-quarter financial performance and expectations of a continuing volatile operating environment, FedEx is withdrawing the FY2023 earnings forecast presented on June 23, 2022.

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