Shares of FedEx (FDX) are down 10% after the logistics and delivery company missed Wall Street’s revenue forecast and provided weak forward guidance.
FedEx reported earnings per share of $3.99 U.S. compared to $4.18 U.S. that was expected.
Despite the miss, earnings were up more than 25% from a year earlier. The company credited cost-cutting initiatives for the higher profit.
Revenue in the quarter declined 3% to $22.17 billion U.S. from a year earlier, also missing analysts’ estimates.
Looking ahead, FedEx said that it expects a low-single-digit decline in revenue for the entire fiscal year, down from a previous forecast of flat sales. FedEx’s fiscal year ends on May 31.
It was the second consecutive quarter that FedEx lowered its sales outlook, citing weakening demand for its services.
The company’s Express delivery unit was especially challenged in the most recent quarter, experiencing lower demand, surcharges, and customers shifting to cheaper alternatives.
The company said that its operating income should improve in the months ahead due to its ongoing cost-cutting plan.
Prior to today (Dec. 20), the stock of FedEx had increased 58% in 2023 to trade at $280 U.S. per share.
