(Bloomberg) – FedEx Corp. fell after a parcel delivery company lowered its guidance for the third year in a row, citing uncertain demand for inflation and shipping.
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Adjusted revenue is expected to fall below the average analyst estimate of $18.95, ranging from $18.60 per share this fiscal year. Fedex also warned that sales could fall slightly year-on-year compared to previous expectations that sales were nearly flat.
FedEx is the latest US company to weaken consumer confidence and raise alarms amid a potential fallout from President Donald Trump’s escalating trade war. Parcel companies believe they are considered economic bells due to their wide range of stripes of the global economy, but they said their latest outlook assumes that the global economic, political and trade environment will not deteriorate any further.
Stocks fell the most since September 20th as of 9:45am in New York on Friday. Until the end of Thursday, shares fell 12% this year.
“Like everyone else in the market, FedEx couldn’t avoid an uncertain macro environment,” Merius research analyst Connor Cunningham said in a note to his client.
Higher than expected inflation in the current quarter puts pressure on costs, CEO Raj Subramaniam said Thursday during a conference call with analysts.
The weaknesses from industry customers are focused on services that cater to businesses, Chief Financial Officer John Dietrich said in a statement released on Thursday. It was also breached the expiration of the contract to carry the US Postal Service package, which was expected.
Trump’s tariff proposals include revoking the so-called minimal exemption for less-value shipments — made FedEx particularly difficult, according to Bloomberg Intelligence Logistics Analyst Lee Klaskow.
“They throw numbers there and want the best,” Kraskow said in an interview. “The ability to beat or not reach their expectations, after all,” depends on the volume.
Third-quarter earnings of $4.51 per share also fell below Wall Street’s estimated $4.57. Subramaniam said in a statement that the company faced a “very challenging” operating environment, including peak transport seasons and shortened bad weather.
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