U.S. package delivery company FedEx (NYSE:FDX) suspended its 2020 profit outlook on Tuesday, citing the “significant impact” of the coronavirus, and said it would cut costs due to the uncertainty wrought by the pandemic.
Even so, the company reported quarterly revenue that beat market expectations as more businesses turned to its international express plane service to safeguard their supply chains as COVID-19 illnesses and deaths mount around the world.
FedEx joined Denmark’s DSV Panalpina, a major transportation and logistics provider, in suspending profit forecasts due to unprecedented business disruption from the virus.
FedEx, which benefited from President Donald Trump’s corporate tax cut, submitted a request to the U.S. government for "liquidity support," Chief Financial Officer Alan Graf said on a conference call with analysts.
The package delivery company’s adjusted net income dropped 53.5% year-over-year to $371 million, or $1.41 per share, for the fiscal third quarter ended Feb. 29. Revenue rose about 3% to $17.5 billion.
Analysts on average expected earnings of $1.41 per share and revenue of $16.89 billion
The company — whose rivals include United Parcel Service (NYSE:UPS) and Amazon’s (NASDAQ:AMZN) homegrown delivery operation — was grappling with the integration of its TNT Express unit, higher costs related to launching Sunday home delivery, and the loss of Amazon.com as a customer before the deadly virus outbreak began.
FedEx shares gains $3.39, or 3.6%, to open Wednesday at $98.35
