FedEx (FDX) fell 9% in morning trading after the company reduced its full-year earnings expectations to a range of $6.25 to $6.75, from $6.35 to $6.85 on weak shipment volume, particularly in Japan. Analysts have been projecting $6.40 per share.
FedEx reported second-quarter earnings of $1.46 per share, in line with expectations. But the market was clearly focused on the company’s guidance, which does not bode well for the U.S. or global economy.
“The U.S. and global economy grew at a slower rate than we anticipated during the quarter,� said FedEx CFO Alan B. Graf, Jr. �While FedEx Ground and FedEx Freight achieved improved operating results despite lower than expected growth, the more rapid decline in demand for FedEx Express services, particularly from Asia, outpaced our ability to reduce operating costs. We have slightly reduced our earnings forecast to reflect current business conditions and are aggressively working to adjust our cost structure to match demand levels.�
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