FedEx disappointed investors Thursday with a surprise earnings miss.
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stock was tumbling after the company doubly disappointed investors Thursday announcing weak quarterly results earlier than expected while withdrawing its full-year financial guidance.
The stock was down more the 12% in after-hours trading after
(ticker: FDX) said it earned $3.44 a share from $23.2 billion in sales in its fiscal 2023 first quarter which ended in August. Wall Street was looking for $5.10 in per-share earnings from $23.5 billion in sales.
Sales were close, but management said revenue was impacted by “global volume softness.” The economy is slowing. Costs are also a problem. The company is going to close more than 90 FedEx office locations, slow hiring, and consolidate some package sorting operations, among other actions, to save some money.
All that led to FedEx withdrawing its guidance for the full year. Back in June, the company said it expected to earn between $22.50 and $24.50 a share.
“Results were significantly worse than we feared,” wrote Citi analyst Christian Wetherbee in a Thursday report. He expected some struggle for the company too. Wetherbee downgraded shares to Hold from Buy on Sept. 6. FedEx’s Express package delivery business missed his estimates and FedEx’s Ground business, which provides lower cost, day-certain package delivery, was also weak. FedEx’s freight business was better than Wetherbee expected.
“While this performance is disappointing, we are aggressively accelerating cost reduction…