FedEx’s stock tanked after the company cut its outlook for the year, he said.

Shares of FedEx Corp fell nearly 17% after the logistics company released its outlook for the year, calling for quarterly profit and lower revenue and saying fiscal 2023 is getting worse.

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The first quarter of the fiscal was hit by low volumes globally, a trend that worsened towards the end of the quarter. He expects the business situation to “weaken further” in the fiscal second quarter.

The company called for first-quarter adjusted earnings of $3.44 billion on sales of $23.3 billion.

Analysts polled by FactSet expect the company to report adjusted EPS of $5.14 on sales of $23.6 billion for the quarter when it reports a full financial snapshot on Sept. 22.

FedEx blamed “macroeconomic weakness” in Asia and “service challenges” in Europe for the $500 million revenue shortfall in these regions. Moreover, revenue from FedEx Ground was about $300 million below the company’s forecast, the company said.

FedEx has pledged to “aggressively” cut costs and said it is considering other ways to “increase productivity.”

Among other actions, FedEx said it will close more than 90 FedEx office locations and five corporate offices and freeze new hires.

Just three months ago, FedEx gave investors its fiscal outlook for fiscal year 2023.

In June, the company said its FedEx Express business improved in part due to fuel surcharges. But he has already warned that the rate will be lower globally due to pandemic lockdowns and economic and geopolitical uncertainty in Asia and beyond. FedEx Ground also reported lower operating results.

In addition to releasing its fiscal 2023 guidance, FedEx called for fiscal second-quarter revenue of between $23.5 billion and $24 billion, and adjusted EPS at $2.75 “or higher.” That compares with expectations for EPS of $5.48 on sales of $24.9 billion for the quarter, according to FactSet.

FedEx lowered capital spending to $6.3 billion, compared to a previous forecast of $6.8 billion. The company has kept its $1.5 billion buyback plan intact, saying it expects to buy back $1 billion in the fiscal second quarter.

FedEx shares have lost 21% so far this year, compared with about 16% for the S&P 500 index. SPX,

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