FedEx Slips Lower After-Hours As Trade Tensions & Global Weakness Weigh On Performance


FedEx Corporation (NYSE: FDX) shares slipped 2% in after-hours trading Tuesday after the company warned investors that trade uncertainty and macroeconomic weakness would affect its performance in fiscal 2020.

“Our fiscal 2020 performance is being negatively affected by continued weakness in global trade and industrial production, especially at FedEx Express,” said Alan Graf, FedEx Chief Financial Officer.

The shipping giant fourth-quarter earnings beat on both top and bottom lines. Memphis-based FedEx announced its financial results just hours after suing the U.S. Department of Commerce over export restrictions.

FedEx said the current Export Administration Regulations force it to act as a “policeman.” The company argues that it shouldn’t be held liable if it inadvertently shipped items that violate the U.S. government ban on exports to Chinese companies such as Huawei Technologies Co Ltd.

FedEx shares declined more than 2% after markets closed on Tuesday. The stock has lost more than 3% this year and more than 32% over the past 12 months.

FDX Earnings & Outlook

FedEx had net loss of $1.97 billion, or $7.56 per share, versus net income of $1.13 billion, or $4.15 per share, in the same period a year earlier. Excluding one-time costs and gains, earnings came to $5.01 per share in the three months ended May 31, 2019. Analysts surveyed by Refinitiv had forecast adjusted earnings of $4.85 per share.

Revenue, the company said, was $17.8 billion compared with $17.3 billion in the earlier-year period. On average, analysts were expecting revenue of $17.79 billion based on figures compiled by Refinitiv.

Excluding retirement-plan accounting adjustments, the company expects fiscal 2020 per-share earnings to be in the low-single-digit range for the year. Analysts expect the company to post adjusted earnings of $3.47 on revenue of $17.3 billion for the current quarter.

FedEx CEO Comments

“Fiscal 2019 was a year of both challenge and change for FedEx,” said Frederick W. Smith, FedEx Corp. chairman and CEO. FedEx enters fiscal 2020 with a sharp focus on extending our lead as the premier global transportation and logistics company and on making the necessary investments today to capture the significant market opportunities we see for the future.”

These actions include enhancing FedEx Ground capabilities, speed and efficiency; improving FedEx Express hub automation; modernizing our FedEx Express air fleet; integrating TNT Express; and reducing unit costs and increasing productivity,” Smith continued.

FedEx Corp Profile

FedEx pioneered overnight delivery in 1973 and remains the world’s largest express delivery firm. In fiscal 2018, FedEx derived about 55% of its $65 billion top line from its express division, 28% of sales from ground, and 10% from its freight less-than-truckload trucking segment.

FedEx Office provides document production and shipping services, and Trade Networks offers freight forwarding. FedEx acquired the Dutch parcel delivery firm, TNT Express, in 2016. – Warrior Trading News