A FedEx plane carrying Ya Ya, a female giant panda that has lived in the United States for two decades, lands at Shanghai Pudong International Airport on April 27, 2023 in Shanghai, China.
Vcg | Visual China Group | Getty Images
FedEx shares tumbled 8% in after-hours trading Tuesday after the package-delivery giant lowered its revenue forecast as weaker demand hit sales.
The company said it expects a low-single-digit decline in revenue for the fiscal year, down from a previous forecast for flat sales year-over-year. Analysts had expected a revenue drop of less than 1% in the current fiscal year, according to LSEG, formerly known as Refinitiv.
It’s the second consecutive quarter FedEx has lowered its sales outlook.
The company’s Express unit, its largest, was especially challenged in the quarter with lower demand, surcharges and customers’ shifting to cheaper services, FedEx said.
Here’s how FedEx performed versus Wall Street’s expectations:
- Adjusted earnings per share: $3.99 vs. $4.18, according to analysts surveyed by LSEG
- Automotive revenue: $22.17 billion vs. $22.41 billion expected
For the three-month period ended Nov. 30, FedEx reported net income of $900 million, or $3.55 a share, versus $788 million, or $3.07 a share, a year earlier. Excluding certain items, the company posted per-share earnings of $3.99.
The company credited cost-cutting initiatives for its higher profit. Revenue fell 3% to $22.17 billion from a year earlier.
“FedEx has delivered an unprecedented two consecutive quarters of operating income growth and margin expansion even with lower revenue, clear evidence of the progress we are making on our transformation as we navigate an uncertain demand environment,” FedEx CEO Raj Subramaniam said in a news release.