FedEx Pulls Profit Forecast, Stock Sinks24%
FedEx Corp's shares tracked their worst day on Friday, Sept. 16, 2022, after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround, Reuters reported.
Photo Insert: Analysts blamed company-specific problems and missteps over the last few years for the woes.
The preliminary results sent the stock tumbling 24% to about $155.95, with the company poised to shed about $12.5 billion in market capitalization. The gloomy outlook comes amid investor anxiety that the US Federal Reserve's rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.
"We suspect that headwinds from an inflation-fatigued U.S. economy, a resource-constrained European economy, and second-order effects from lockdowns in China proved too much to overcome," Cowen analyst Helane Becker said.
The US firm joins global logistics peers such as Hong Kong's Cathay Pacific Airways (0293.HK) and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.
Analysts blamed company-specific problems and missteps over the last few years for the woes, stepping up pressure on CEO Raj Subramaniam, who was appointed to the job in March, to do more to win back investor confidence.
Rival United Parcel Service shed 4.0%, XPO Logistics dropped 6.9% and e-commerce giant Amazon.com slipped 3.1%. The Dow Jones Transport index slipped nearly 5%., while the broader S&P 500 fell about 1%.
Across the Atlantic, Germany's Deutsche Post shed 6.1%, London's Royal Mail fell 7.5% and Copenhagen-based DSV dropped 6.4% after the news. The stock's drop on Friday, if losses hold, will surpass its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.