FedEx Corp (NYSE: NYSE:FDX) shares are trading lower in Thursday's after-hours session after the company reported preliminary results.
FedEx said its fiscal first-quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter.
FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe. As a result, FedEx now expects revenue in this segment to come in at approximately $500 million below previous company forecasts. FedEx Ground revenue is expected to be roughly $300 million below company forecasts.
FedEx now expects first-quarter revenue of approximately $23.2 billion and first-quarter adjusted earnings to be around $3.44 per share.
"Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations," said Raj Subramaniam, president and CEO of FedEx.
"While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives," Subramaniam added.
FedEx has withdrawn its fiscal year 2023 earnings forecast. The company expects business conditions to weaken further in the second quarter.
FedEx expects second-quarter revenue to be between $23.5 billion and $24 billion. The company expects adjusted second-quarter earnings to be $2.75 or greater.
FedEx said it plans to provide additional details on its cost initiatives and updated outlook during its upcoming earnings call on Sept. 22.
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FDX Price Action: FedEx has a 52-week high of $266.79 and a 52-week low of $192.82.
The stock was down 15.5% in after-hours at $173 at the time of publication.
Photo: John R Perry from Flickr.
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