FedEx issues ominous warning on global economy, stocks fall

FedEx (FDX) withdrew its full-year profit guidance and reported preliminary first-quarter results that missed Wall Street estimates, sending shares tumbling in extended trading Thursday.

“Global volumes declined as macroeconomic trends worsened significantly later in the quarter, both internationally and in the US,” FedEx CEO Raj Subramaniam warned in the message. “We are quickly addressing these headwinds, but given the speed at which conditions have changed, first-quarter results are below our expectations.”

FedEx shares fell as much as 15% in after-hours trading.

A FedEx delivery truck leaves a facility in Brooklyn, New York, U.S., May 9, 2022. REUTERS/Andrew Kelly

A FedEx delivery truck leaves a facility in Brooklyn, New York, U.S., May 9, 2022. REUTERS/Andrew Kelly

The cost-cutting measures outlined by FedEx include reducing flights, temporarily parking aircraft, closing more than 90 FedEx offices and delaying hiring plans.

“We are aggressively accelerating cost reduction efforts and evaluating additional measures to increase productivity, reduce variable costs and implement structural cost reduction initiatives,” Subramaniam added.

Adjusted earnings for the company’s fiscal first quarter were $3.44 per share, below Wall Street’s estimate of $5.10 on revenue of $23.2 billion. Back in June, the company said expects full-year earnings per share to fall in the $22.50-$24.50 range.

Preliminary results from FedEx, which is seen as a leader in the global economy, sent shares of UPS (UPS) and Amazon (AMZN) lower in after-hours trading; UPS shares lost more than 5%, while Amazon fell about 2% late Thursday.

Other movers after hours

Bowlero Corp. (BOWL): Shares in the bowling alley operator jumped 8% in after-hours trading after the company’s fiscal fourth-quarter sales beat expectations. Bowlero reported revenue of $267.7 million, up 68% year-over-year and beating Wall Street’s estimate of $194 million. Net income was $6.9 million for the quarter.

Texas Instruments (TXN): The company raised its dividend 8% to $1.24 per share and authorized an additional $15 billion in buybacks. The higher dividend marks the 19th consecutive year of increases and will be paid on November 15, 2022 to shareholders of record on October 31, 2022.

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