FedEx Reports Disappointing Quarterly Results

Shipping giant FedEx reported its first quarter financial report on Tuesday that missed expectations on both the top and bottom line. Additionally the company also lowered its guidance for fiscal 2020.

Shares of the stock fell over 8% in after-hours trading after the report was released.

For the first quarter, FedEx reported revenue of $17.05 billion, trailing the $17.06 billion that analysts had been waiting for. Adjusted earnings at $3.05 a share were below the $3.16 that was expected.

“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” stated Fred Smith, FedEx chairman and CEO.

He also added, “Despite these challenges, we are positioning FedEx to leverage future growth opportunities as we continue the integration of TNT Express, enhance FedEx Ground residential delivery capabilities and modernize the FedEx Express air fleet and hub operations.”

Looking ahead, the company has lowered its fiscal 2020 earnings forecast, “as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 forecast in June.”

For the full fiscal year, Fedex is expecting earnings of between $10.00 to $12.00 per share. FedEx reiterated its forecast for 2020 capital expenditures of $5.9 billion.

“FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions to the global FedEx Express air network to better match capacity with demand,” said CFO Alan B. Graf, Jr.

He added, “However, we are continuing to make strategic investments to improve our capabilities and efficiency, which we expect will drive long-term increases in earnings, margins, cash flows and returns.”

Disclaimer: We have no position in FedEx Corporation (NYSE: FDX) and have not been compensated for this article.