FedEx still insists the economy is solid, but it slashed its forecast due to a Global Trade Slowdown.
FedEx Corp on Tuesday slashed its 2019 forecast after Europe’s economy weakened and the U.S. trade row exacerbated a slowdown in China, sending shares in the package delivery company tumbling more than 6 percent after the closing bell.
“Global trade has slowed in recent months and leading indicators point to ongoing deceleration,” said FedEx Chief Financial Officer Alan Graf.
FedEx, which is in the throes of a record-setting winter holiday shipping season, launched a new cost-cutting campaign after its Express revenues took a hit. On Dec. 7, FedEx announced that the CEO of its Express unit was retiring at year-end.
Memphis, Tennessee-based FedEx cut its fiscal 2019 earnings forecast to $15.50 to $16.60 per share from $17.20 to $17.80 per share – before year-end mark-to-market retirement plan accounting adjustments and excluding TNT Express integration expenses.
The new forecast assumes moderate U.S. domestic economic growth and no further weakening in international economic conditions, FedEx said.