FedEx "Decline in Shipments Due to US Economic Downturn"... Stock Plummets 16%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Global logistics company FedEx saw its stock price plunge more than 16% in after-hours trading following a forecast of deteriorating earnings due to a decline in shipment volumes amid worsening macroeconomic conditions in the United States and globally.

According to Bloomberg and other sources, FedEx CEO Raj Subramaniam stated in a release that "In the second half of the quarter (June to August), macroeconomic trends have significantly worsened internationally and in the U.S., leading to a decrease in global shipment volumes." He added, "While we are quickly responding to these headwinds, our performance is expected to fall short of our projections." He also noted that FedEx Express could be impacted by macroeconomic weakness in the Asia region and difficulties in service delivery in Europe.

FedEx announced it is withdrawing its revenue forecast for fiscal year 2023, which had been issued in June. The company plans to continue cost-cutting measures but expects conditions to worsen further in the second quarter of fiscal year 2023 (September to November), projecting revenue in the range of $23.5 billion to $24 billion during this period.

Following the earnings announcement, FedEx's stock price has dropped more than 16%.

Since taking office in June, CEO Subramaniam has responded to shareholder pressure to improve profitability by freezing hiring, closing 90 FedEx offices, suspending some cargo aircraft operations, and halting Sunday operations.

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