© Reuters FedEx (FDX) issues high profit warning as global volumes
By Investing.com staff
FedEx Corp. (NYSE: ) sent its stock down 11% in the afternoon after it issued guidance for the full year after warning for the first quarter.
The shipping giant reported Q1 non-GAAP EPS of $3.44, down from $4.37 last year and below consensus of $5.14.
The company said that results were negatively impacted by global volume softness that accelerated in the final weeks of the quarter.
FedEx Express’ results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, which resulted in a revenue shortfall of approximately $500 million relative to company forecasts. FedEx Ground’s revenue was about $300 million below the company’s forecast.
“As macroeconomic trends worsened significantly during the quarter, global volumes declined globally and in the US, but we will resolve these headwinds quickly, but given the speed at which conditions have changed, first quarter results were below our expectations,” said Raj Subramaniam, FedEx’s president and CEO. . “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to increase productivity, reduce variable costs and implement structural cost reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I am confident that we will meet our fiscal year 2025 financial targets.
Due to the financial performance in the first quarter and expectations for a continued volatile operating environment, FedEx is raising its 2023 earnings forecast, which was provided on June 23, 2022.