Executive Briefings

Glum About the Economy, FedEx Cuts Its Outlook

FedEx Corp. says the global economy is worsening and it's cutting its forecast for the fiscal year ending in May.

The world's second-largest package delivery company also said that net income for the current quarter ending in November should fall well below last year's quarter. The stock lost about 2 percent in pre-market trading.

The Memphis-based company now expects to earn between $6.20 and $6.60 per share for the full fiscal year, compared with a previous forecast of $6.90 to $7.40 per share.

FedEx is seeing a drop in demand for more expensive priority services. As the global economy has slowed, FedEx customers have switched to cheaper deferred delivery services. FedEx hasn't been able to cut costs fast enough to match the decline in demand.

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The world's second-largest package delivery company also said that net income for the current quarter ending in November should fall well below last year's quarter. The stock lost about 2 percent in pre-market trading.

The Memphis-based company now expects to earn between $6.20 and $6.60 per share for the full fiscal year, compared with a previous forecast of $6.90 to $7.40 per share.

FedEx is seeing a drop in demand for more expensive priority services. As the global economy has slowed, FedEx customers have switched to cheaper deferred delivery services. FedEx hasn't been able to cut costs fast enough to match the decline in demand.

Read Full Article