FedEx collapses (-16.5%) after the ominous warning on the global economy

US transportation giant FedEx lost 16.6% in the trading period after the close To 204.87 dollars, compared to 53.25 billion capitalization, after withdrawing guidance On the full year earnings and made profit warning. To affect the accounts, the global economic slowdown. The Memphis, Tennessee-based group released preliminary results for the first quarter that were well below Wall Street estimates, sending shares down.

“Global volumes have decreased since then Macroeconomic trends worsened considerably in the latter part of the first quarter (Expired August 31, editor), both internationally and in the US, “FedEx CEO Raj Subramaniam explained in a company statement.” We are dealing with these issues quickly. But given how quickly conditions have changed, first-quarter results are below our expectations.”

The warning comes as consumers around the world struggle with the rising costs of basic necessities such as food, fuel and household related expenses as they shift shopping from e-commerce to e-commerce, meals and travel. The World Bank warned on Thursday that the world’s three largest economies, the United States, China and the eurozone, had suffered a sharp slowdown and that a “moderate blow to the global economy next year could send it into a recession.”

Profit drops by a third, cuts begin

FedEx’s cost-cutting measures include a cut tripstemporarily parked aircraft, Close more than 90 offices Postponing hiring plans.

“We are aggressively accelerating cost-cutting efforts, evaluating additional measures to improve productivity, reducing variable cost items, and implementing structural initiatives in this direction,” Subramaniam added.

FedEx expects to post $23.2 billion in revenue for the first quarter, missing analyst expectations of $23.59 billion, according to Refinitiv Ibes data. Projected adjusted earnings per share of $3.44 per share, well below estimates of $5.14 (-32.5%). In June, the company said it expected full-year earnings per share to fall in the $22.50 to $24.50 range.

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FedEx’s preliminary results, which are a wake-up call for the global economy, sent UPS and Amazon shares tumbling after hours, with the former losing more than 5%, while the latter fell about 2%. . (reproduction reserved)

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