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FedEx is plummeting after earnings. Here's why

What investors should look for in FedEx's earnings

FedEx is plummeting after hours on Tuesday.

The delivery company was down nearly 10% in extended trading after posting an earnings miss as trade worries and policy uncertainty pressured its performance.

The quarter didn't surprise Helane Becker, senior research analyst at Cowen. The firm had lowered forecasts for its first quarter ended in August heading into the report as FedEx righted its international operations and dealt with a slowing global economy.

Cowen lowered its first-quarter earnings estimates for FedEx on Friday to $3.01 a share, down from a previous estimate of $3.08 a share. FedEx reported first-quarter earnings of $3.05 a share.

FedEx also lowered its full-year earnings and revenue, citing similar issues with trade and global economic weakness as reason for the reduction. The company anticipates full-year earnings of $10 to $12 per diluted share, below Cowen's target of $14.55.

The company also said its loss of a large customer, presumably Amazon, had negatively affected results. FedEx chose not to renew its ground-shipping and express contracts with Amazon earlier this year. Becker had said earlier in the day that that move could reduce its annual revenue by around $1 billion. However, Becker said it should recoup that fairly quickly.

"We expect that will happen in short order. We think the Amazon business was low margin -- like a low single-digit margin business. And most of their business is kind of higher margin in the double-digit range. So you replaced low margin with high-margin business, they should recoup that revenue fairly rapidly. But we're expecting this to kind of be a transition year," Becker told CNBC's "Trading Nation" on Tuesday ahead of the release.

She adds that the stock could sell off the day after earnings as it has done in the past, though it should quickly rebound. Cowen has an overweight rating and $206 price target on the stock, implying nearly 20% upside.