(Reuters) -FedEx Corp lowered its full-year revenue and profit forecasts on Thursday, as the parcel delivery firm struggles with continued softness and uncertainty in the U.S. industrial economy. CEO Raj Subramaniam said the results came as the company was “navigating a very challenging operating environment, including a compressed peak season and severe weather events.” FedEx […]
Business
FedEx cuts full-year results forecast on ‘uncertainty’ in economy, bad weather
Audio By Carbonatix
(Reuters) -FedEx Corp lowered its full-year revenue and profit forecasts on Thursday, as the parcel delivery firm struggles with continued softness and uncertainty in the U.S. industrial economy.
CEO Raj Subramaniam said the results came as the company was “navigating a very challenging operating environment, including a compressed peak season and severe weather events.”
FedEx shares were down more than 4% to $236 in after-hours trade, while rival United Parcel Service stock fell less than 1%.
FedEx and United Parcel Service have been slashing costs as they battle soft demand from delivery customers, who are also slowing down shipments to save money. The threat of new U.S. tariffs could further depress their package volumes and spark a trade war that accelerates that decline.
The company expects its full-year revenue to be flat to slightly down year over year, compared to the prior forecast of approximately flat.
It now expects adjusted profit to be in a range of $18.00 to $18.60 per share, from its previous outlook of $19.00 to $20.00 each.
“Our revised earnings outlook reflects continued weakness and uncertainty in the U.S. industrial economy, which is constraining demand for our business-to-business services,” Chief Financial Officer John Dietrich said.
Memphis-based FedEx earlier in December lowered its profit outlook for the full year ending May 2025, calling for an adjusted profit of $19 to $20 per share. That was down from its initial target range of $20 to $22 per share.
FedEx posted third-quarter adjusted profit of $4.51 per share, up from $3.86 per share last year, but below Wall Street’s estimates of $4.54 apiece, according to data compiled by LSEG.
The company reported quarterly revenue of $22.2 billion, up from $21.7 billion last year, beating the analysts’ average estimate of $21.89 billion.
FedEx in December announced long-awaited plans to spin off its profitable Freight division, a move analysts said could unlock up to $20 billion in shareholder value while clearing the way for FedEx management to focus on merging operations of its separate Express and Ground units to boost profits. After UPS picked the USPS business from FedEx, the former said in January it was accelerating a plan to slash deliveries for its largest customer, Amazon.com. Both companies aim to expand their specialty businesses, which provide lucrative shipments for healthcare companies and other industries that require temperature-control shipments, overnight delivery and other value-added services. Across the board, they are in a fierce battle for the same customers — which could lead to a price war.
(Reporting by Lisa Baertlein in Los Angeles and Abhinav Parmar in Bengaluru; Editing by Alan Barona)