FedEx Corp. shares plunged in after-hours trading after the company lowered its earnings guidance for fiscal 2020, saying increased trade tensions and weakening of global economic conditions were weighing on its revenue outlook.
FedEx now expects its adjusted EPS for the full fiscal year to be in the range of $11.00 to $13.00. In June, the company projected for fiscal 2020 a mid-single-digit percentage point earnings decline from the non-GAAP fiscal 2019 EPS of $15.52.
"FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions to the global FedEx Express air network to better match capacity with demand," said CFO Alan Graf Jr.
In the fiscal first quarter that ended Aug. 31, FedEx reported a non-GAAP net income of $800 million, or $3.05 per share, down from $933 million, or $3.46 per share, in the year-ago quarter.
The S&P Global Market Intelligence consensus normalized EPS estimate for the fiscal first quarter was $3.15.
On a GAAP basis, net income fell year over year to $745 million, or $2.84 per share, from $835 million, or $3.10 per share.
Revenue came in at $17.05 billion in the quarter, unchanged from a year earlier.
"Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty," said FedEx Chairman and CEO Frederick Smith.
FedEx shares were down 9.29% shortly after 4:40 p.m. ET. The stock ended the trading day 0.16% lower at $173.30 per share.
