Executive Briefings

Glum Forecast by FedEx Sends Depressing Signal to Financial World

FedEx Corp. slashed profit projections for 2012 after posting another quarterly slump in earnings, and its chief executive said trade has slowed to levels not seen during the last two significant economic downturns. That's not exactly what Wall Street wants to hear from a company considered to be a bellwether of the global economy. And it also portends bad news for the hundreds of major U.S. companies that will start reporting third-quarter earnings in a few weeks.

"In the context of the last 10 years of corporate profits, we're seeing numbers now that match up with recessionary times," said Christine Short, a senior manager at S&P Capital IQ in New York.

Companies in the Standard & Poor's 500 index are expected to report that earnings declined by an average of 2.1 percent during the last three months, according to research by Thomson Reuters. Of those companies, 88 have issued "negative guidance" - signaling their profits will land below expectations.

It's just more evidence that the global economy has a way to go to a full recovery.

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"In the context of the last 10 years of corporate profits, we're seeing numbers now that match up with recessionary times," said Christine Short, a senior manager at S&P Capital IQ in New York.

Companies in the Standard & Poor's 500 index are expected to report that earnings declined by an average of 2.1 percent during the last three months, according to research by Thomson Reuters. Of those companies, 88 have issued "negative guidance" - signaling their profits will land below expectations.

It's just more evidence that the global economy has a way to go to a full recovery.

Read Full Article