FedEx Corp. (FDX) released its latest financials on Tuesday, reporting a quarterly profit that missed predicted targets by a significant margin. The express logistics leader also cut its full-year non-GAAP revenue to $22.8bn.
FedEx misses the mark on quarterly profits and cuts full-year revenue forecast
In response, the company’s shares plunged by 9.8% in line with the US Postal Service’s decrease in demand. During after-hours trading on Tuesday, the FedEx shares dropped as low as $252.58 after closing the day on $280.
According to a Reuters report, these movements also affected competitor United Parcel Service (UPS.N), which experienced a 2.9% drop. In its public release, FedEx indicated a 23% jump in adjusted earnings for the quarter ending 30 November. LSEG, however shows the $1.01bn adjustment still came in 19 cents per share less than analyst forecasts.
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In its SEC filing, the company said for the rest of the fiscal year ending May 2024:
We expect revenue will continue to be pressured by volatile macroeconomic conditions negatively affecting customer demand for our services across our transportation companies.
Compared to last year, FedEx anticipates a slight percentage decline in revenue. To appease investors, the organisation plans to repurchase an extra $1bn of common stock during FY 2024 to cut costs and boost profits.
Other financial benchmarks reflected a 60% decline in operating income at the air-based express unit. This was partly blamed on the decrease in business from the UPS side as operations shifted from more expensive air shipping rates to more affordable land-based services. FedEx remains confident that it will get profits back on track in the coming year.
