- FedEx says it is lowering its full-year guidance for the fiscal year 2020 and now projects earnings between $10.00 to $12.00 per diluted share.
- In August, FedEx announced it was ending its ground delivery contract with Amazon.
Shares of FedEx fell more than 9% during after-hours trading on Tuesday after the company missed quarterly earnings estimates and lowered its 2020 guidance.
Here's how the company did for its fiscal first quarter, ended Aug. 31, compared with Wall Street expectations:
- Adjusted EPS: $3.05 per share vs. $3.15 per share, according to Refinitiv
- Revenue: $17.05 billion vs. estimate of $17.06 billion, according to Refinitiv
"Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty," Chairman and CEO Frederick Smith said in a statement. "Despite these challenges, we are positioning FedEx to leverage future growth opportunities as we continue the integration of TNT Express, enhance FedEx Ground residential delivery capabilities and modernize the FedEx Express air fleet and hub operations."
FedEx said it was lowering its full-year guidance for the fiscal year 2020 and now projects earnings between $10.00 to $12.00 per diluted share.
That revised outlook also reflects "increased FedEx Ground costs and August's loss of FedEx Ground business from a large customer," the company said in a release.
The companies stated earlier in June that they were ending their FedEx Express agreement, which would only affect air services.
Amazon has increasingly become a rival to FedEx as it began creating and expanding its own delivery network. The e-commerce behemoth announced a Delivery Services Partners program in late June and expanded its air fleet to include 50 planes so they wouldn't have to rely on FedEx and UPS.
"This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do," a FedEx spokesperson said at the time in response to the expiration of the contract.
The under-performing results also come at a time of unresolved trade disputes and a weakening global economy. President Donald Trump imposed 15% tariffs on about $112 billion worth of Chinese imports on Sept. 1 and the administration delayed increasing tariffs on $250 billion worth of goods from Oct. 1 to Oct. 15.
As trade tensions intensified over the past several months, FedEx experienced uncertainty heading into 2020 amid market volatility and fears of a global recession.