(Waverly Colville – CNBC)
FedEx dropped more than 6% on Tuesday after the company lowered its 2019 earnings guidance and reported weakness in its international business, particularly in Europe, while announcing plans to cut costs.
The logistics company lowered its full year 2019 earnings guidance to a range of $15.50 to $16.60 per share, down from $17.20 to $17.80 per share. Analysts expected $17.33 per share.
“Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term,” said Alan B. Graf, Jr., executive vice president and chief financial officer of FedEx. “These trends, coupled with the change in service mix at FedEx Express, are negatively impacting the segment’s financial results.”
UPS shares also dropped more than 3 percent after hours.
In October, the International Monetary Fund cut its global growth forecasts, citing trade tensions between the US and its trading partners. It expects the global economy to grow at 3.7 percent this year and next, down 0.2 percentage points from its previous prediction. Click here to read more.
- FedEx Sees Global Trade Slowdown, Says U.S. Economy Still ‘Solid’ (Reuters)
- FedEx Starts Buyout Program as Express Struggles (Wall Street Journal)
- FedEx Stock Takes Beating on Bleak European Outlook (Bloomberg)