A FedEx plane lands at Shanghai Pudong International Airport in Shanghai on April 27, 2023.
Vcg | Visual China Group | Getty Images
FedEx shares tumbled 8% in after-hours trading Tuesday after the package delivery giant lowered its revenue forecast as weaker demand hit sales.
The company said it expects a low-single-digit decline in revenue for the fiscal year, down from a previous forecast for flat sales year over year. Analysts had expected a revenue drop of less than 1% in the current fiscal year, according to LSEG, formerly known as Refinitiv.
It’s the second consecutive quarter FedEx has lowered its sales outlook.
The company’s Express unit, its largest, was especially challenged in the quarter with lower demand, surcharges and customers shifting to cheaper services, FedEx said.
Here’s how FedEx performed versus Wall Street’s expectations:
- Adjusted earnings per share: $3.99 vs. $4.18, according to analysts surveyed by LSEG
- Automotive revenue: $22.17 billion vs. $22.41 billion expected
For the three-month period ending Nov. 30, FedEx reported net income of $900 million, or $3.55 a share, versus $788 million, or $3.07 a share, a year earlier. Excluding certain items, the company posted earnings per share of $3.99.
The company credited cost-cutting initiatives for its higher profit. Revenue fell 3% to $22.17 billion from a year earlier.
“FedEx has delivered an unprecedented two consecutive quarters of operating income growth and margin expansion even with lower revenue, clear evidence of the progress we are making on our transformation as we navigate an uncertain demand environment,” FedEx CEO Raj Subramaniam said in a news release.
