FedEx cuts 2019 forecast again, shares fall 5 percent by Reuters
© Reuters. FILE PHOTO: Traders are working on the FedEx transaction on the floor of the New York Stock Exchange By Lisa Baertlein and Ankit Ajmera
(Reuters) – FedEx Corp (NYSE 🙂 on Tuesday cut its forecast for 2019 for the second time on Three months, sending the shares down 5 percent and burning fresh worries, losing the reason in Europe for delivery rivals United Parcel Service Inc (NYSE 🙂 and Deutsche Post (DE 🙂 DHL Group .
The earnings gain and weak quarterly results were another blow to FedEx after asking the December forecast, warning it of a sharp rise in world trade.
The package supplier industry is generally seen as a bellwether for the world economy.
"Slow international macroeconomic conditions and weaker global growth trends continue," said FedEx CFO Alan Graf in a statement Tuesday. [1[ads1]9659004] Leaders also blame the disappointing results at the expense of launch all year round, six days a week at FedEx Ground in the US and Continued weakness in its international Express business, which includes former Dutch delivery company TNT Express.
FedEx acquired the struggling business in 2016 for $ 4.8 billion, and has experienced difficulties integrating it into its own network.
FedEx said in a regulatory filing on Tuesday that it would complete a project allowing packages to flow between FedEx Express and TNT Express networks by the end of 2020, more than four years after the Dutch delivery company was taken over.
By to the integrated challenge, a 2017 cyber attack on TNT's European technology systems FedEx costs around 300 million down dollars to fix and send a number of high-quality, time-sensitive customers into the arms of stronger operators in Europe.
"It's cutthroat over there," said Cathy Morrow Roberson, founder of the consulting company Logistics Trends & Insights. "FedEx Express has some serious issues."
Germany's Deutsche Post DHL earlier this month said there were no noticeable signs of a downturn in the horizon, adding that the broad geographical and operational base would make it resistant even if global economic growth weakened. [L5N20U0TC]
UPS in the Atlanta base has less international exposure than FedEx, and said in January that US results helped buff the impact of global economic softening. [L3N1ZV4LF]
FedEx has shaken management – including the Express division – offered voluntary buyouts and limited discretionary expenses to reduce the downturn.
The result for the quarter that included FedEx's highest vacation vacation and gift yields fell to $ 797 million, or $ 3.03 per diluted share, below analysts' expectations of $ 3.11 per share, according to Refinitive data.
"It looks like UPS had a better high season," Logistics Trends & Insights, Morrow Roberson said. "It looks like UPS was better in planning and forecasting."
FedEx now expects to earn $ 15 , 10 to $ 15.90 for the financial year 2019, which ended May 31. Analysts had predicted full-year funded 2019 earnings per share of $ 15.97.
In the aftermarket, FedEx shares were down 5 percent to $ 172.24.
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