FedEx Hit by Trade Tensions and Split With Amazon -- Update
September 17 2019 - 5:19PM
Dow Jones News
By Paul Ziobro
FedEx Corp.'s profit fell in its latest quarter as added costs
to expand services, the loss of Amazon.com Inc. as a major customer
and a weakening economic backdrop weighed on results, sending its
shares down sharply in after-hours trading.
The delivery giant lowered its outlook for the year and is
taking more cost-cutting steps to try to offset the weaker
environment, including reducing the capacity in its global air
delivery network, which is feeling the effects of global trade
disruption more acutely than other FedEx units.
"Our performance continues to be negatively impacted by a
weakening global macro environment driven by increasing trade
tensions and policy uncertainty," FedEx Chief Executive Frederick
Smith said in a news release.
FedEx said it now expects lower revenue for the coming year than
when it last issued a forecast in June.
Shares of FedEx fell more than 9% to $157.44 in after-hours
trading Tuesday after closing down slightly at $173.30.
For the first quarter, which ended Aug. 31, FedEx reported a
profit of $745 million, or $2.84 a share, compared with net income
of $8.35 million, or $3.10, a year earlier. Excluding integration
expenses, per-share earnings were $3.05.
Revenue declined slightly to $17.05 billion.
Analysts polled by FactSet expected earnings of $3.15 a share
and $17.06 billion in revenue.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
September 17, 2019 17:04 ET (21:04 GMT)
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