(Reuters) – FedEx Corp (FDX.N) on Tuesday forecast full-year earnings below analysts’ estimates and missed expectations for quarterly profit, as the package delivery company cited increased trade tensions and additional weakening of global economic conditions.
FILE PHOTO: A Federal Express Ground truck travels down a highway through Carlsbad, California, U.S., September 16, 2019. REUTERS/Mike Blake
The company’s shares were down nearly 7% in after-market trading.
FedEx said it expects adjusted 2020 earnings of $11.00 to $13.00 per share. Analysts on average had expected a profit of $14.69 per share, according to Refinitiv IBES estimates.
In June, FedEx had forecast a mid-single-digit percentage point decline in adjusted earnings for fiscal 2020.
As the Sino-U.S. trade war continues, the shipper has become the target of Chinese ire over shipping mistakes involving several packages, including parcels addressed to China’s Huawei Technologies Co, which Washington has put on an export blacklist.
“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” Chief Executive Officer Frederick Smith said.
The company said operating results also fell on increased costs to expand service offerings. FedEx added that the impact of one fewer operating day and the loss of business from a large customer also hurt results.
Adjusted net income fell to $800 million, or $3.05 per share, in the quarter ended Aug. 31, from $933 million, or $3.46 per share, a year earlier.
Revenue was flat at $17.05 billion.
Analysts on average had expected earnings of $3.15 per share.
Reporting by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Shounak Dasgupta