FedEx cuts its sales forecast by half a billion dollars as demand for packages tumbles. The CEO says the slowdown portends a global recession.
Shares of FedEx plunged 22% in premarket trading Friday after it warned late Thursday that a slowing economy will cause it to fall $500 million short of its revenue target. The weakening global economy, particularly in Asia and Europe has hurt FedEx's express delivery business. The company said demand for packages weakened considerably in the final weeks of the quarter. FedEx said it expects business conditions to further weaken in the current second quarter, which runs through November.
FedEx said its adjusted earnings for the quarter that ended August 31 will be down $260 million, or 17%, from a year earlier. Revenue rose $1.2 billion, or 5%, despite missing the company's earlier target.While it gave the sharply lowered guidance for the current quarter, FedEx said it was withdrawing its full-year guidance issued in June due to the"continued volatile operating environment.
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