Shares of Federal Express (FDX) are down 13% after the shipping and logistics company announced financial results and forward guidance that fell short of Wall Street’s expectations.
FedEx, as the company is popularly known, reported earnings per share (EPS) of $3.60 U.S., which was well below the $4.75 U.S. consensus forecast of analysts.
Sales of $21.60 billion U.S. also came up short, missing estimates of $21.90 billion U.S.
A year earlier, the company announced earnings of $4.55 U.S. per share and sales of $21.70 billion U.S.
Management blamed the poor results on a slowing U.S. economy that has led companies to cutback on their shipping and logistics orders.
Lower demand for premium services was also cited as a reason for the earnings miss. FedEx’s guidance was also discouraging.
The company said it now expects to earn between $20 U.S. and $21 U.S. a share in its current fiscal year.
The outlook was slightly reduced from previous guidance that had called for earnings of $20 U.S. to $22 U.S. a share.
FedEx executives said on their earnings call with analysts and media that they remain on track to deliver $2.2 billion U.S. in cost savings in the current fiscal year.
The company recently combined its Ground, Services, and Express units into one operating unit. FedEx announced a new $1.5 billion U.S. stock buyback program for the remainder of this fiscal year.
Before today (Sept. 20), FedEx’s stock had risen 19% year to date and was trading at $300.39 U.S. per share.
