FedEx results and sales fail to meet expectations, company guides down

The following are the main findings of the report, compared to consensus expectations established by Bloomberg:

• Returned: $ 17.05 billion versus $ 17.06 billion planned

• Adj. earnings: $ 3.05 per share, compared to $ 3.16 per expected share

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" Our performance continues to be negatively affected by a weakening of the global macroeconomic environment driven by increasing trade tensions and political uncertainty, "said FedEx CEO Fred Smith, in a & nbsp;declaration."data-reactid =" 20 ">" Our performance continues to be affected by a weakened global macroeconomic environment, fueled by growing trade tensions and political uncertainty, "said Fred Smith, chief executive officer of FedEx, in a statement.

"Despite these challenges, we are preparing FedEx to take advantage of future growth opportunities while continuing to integrate TNT Express, improving FedEx Ground's residential delivery capabilities, and modernizing the operations of the airline fleet and hub. FedEx Express, "he added.

FedEx shares fell more than 8% to 16:07. AND, just after the publication of the report.

FedEx also lowered its earnings guidance for fiscal year 2020, "as the company's revenue outlook has been reduced due to increased trade tensions and further weakening of global economic conditions since the forecasts of the company's 2020 fiscal year in June, "says a statement.

The Company expects earnings per share of between $ 10.00 and $ 12.00 for the full year, excluding certain items and before an accounting adjustment for its pension plan measured at fair value. Steps. At the same time, FedEx has reiterated its forecast of $ 5.9 billion in capital spending for 2020.

"FedEx is implementing additional cost reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions in FedEx Express global air network to better tailor capacity to demand," said the director. Alan B. Graf, Jr., in a statement. . "However, we continue to make strategic investments to improve our capabilities and efficiency, which we believe will lead to long-term increases in earnings, margins, cash flow and returns."

The disappointing results come at an already difficult time for FedEx, which has steadily underlined in recent years unresolved commercial tensions and weak growth prospects, sources of uncertainty for the company at the same time. horizon 2020.

Other concerns regarding FedEx's core marine activities have put investors at the forefront of the company's future prospects, especially as competition in the delivery sector continues to intensify. .

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In August, FedEx broke its links with Amazon by signal that it would terminate its land transport contract with the e-commerce giant, after announcing in early June that its FedEx Express agreement with Amazon would expire without renewal, and in the development of its own delivery services, Amazon is increasingly FedEx competitor, who said that the technology giant accounted for only 1.3% of its global annual turnover.UPS), however, maintained its relationship with Amazon. "data-reactid =" 28 "> In August, FedEx broke its ties with Amazon by announcing that it would terminate its ground transportation contract with the e-commerce giant after announcing it earlier in June, would also allow its FedEx Express contract with Amazon to expire without renewal.By building its own delivery services, Amazon is increasingly a competitor of FedEx, which claims that the technology giant represents only 1.3% global UPS annual turnover However, the UPS Peer Delivery Service (UPS) has maintained its relationship with Amazon.

During a call for results on Tuesday, FedEx Graf said that "the loss of Amazon's volume has had a negative impact on the quarter."

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At the same time, FedEx is also struggling with a long-standing integration of Dutch courier TNT, which the Memphis, Tennessee-based company acquired in 2016 for more than $ 4 billion. The company also indicated that this year's consolidated results have been adjusted to reflect a $ 71 million integration charge from TNT Express, or 21 cents per diluted share.

In the conference call with analysts on Tuesday, Graf acknowledged that the company had "exceeded its budget" on TNT's integration. Smith provided updated timeline for TNT integration, indicating that FedEx was "of course [its] to achieve total interoperability of the soil "in its European collection and delivery networks by the end of May 2020.

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