FedEx Slashes Earnings View, Warns Global Trade Is Slowing
12/18/2018
FedEx ( FDX) slashed its earnings guidance, saying its international business weakened as global trade has slowed recently.
FedEx Earnings Estimates: Analysts expect FedEx earnings to jump 27% to $4.05 as fiscal second-quarter sales increase 9% to $17.71 billion, according to Zacks Investment Research.
Results: FedEx earnings of $4.03 a share on revenue of $17.8 billion.
Outlook: Full-year EPS is now seen at $15.50-$16.60, down from an earlier view of $17.20-$17.80 and well below consensus views for $17.32.
"While the U.S. economy remains solid, our international business weakened during the quarter, especially in Europe," said Chairman and CEO Frederick Smith. "We are taking action to mitigate the impact of this trend through new cost-reduction initiatives."
In addition to lowering variable compensation, FedEx is also implementing a voluntary buyout program, international network capacity reductions at FedEx Express, limited hiring in staff functions, and reductions in discretionary spending.
"Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term," said CFO Alan Graf. "These trends, coupled with the change in service mix at FedEx Express, are negatively impacting the segment's financial results. We remain committed to actively managing costs with a heightened focus on increasing efficiency across the organization." ... |
