FedEx Corp. sharply slashed its profit outlook in the latest sign that trade tensions are dragging down U.S. corporate titans.
The forecast sent the courier’s shares tumbling late Tuesday and signaled deepening trouble for FedEx as the U.S. and China battle over tariffs — a standoff that has also ensnared manufacturing giants such as Caterpillar Inc. and Deere & Co. FedEx said it would deepen its cost-cutting drive and retire some cargo jets to contend with the diminished expectations.
The courier’s best-case scenario for adjusted earnings in the fiscal year ending in May was only $13 a share — a dollar short of the lowest of 25 analyst estimates compiled by Bloomberg. The forecast implied at least a 16% drop from the previous year’s level. FedEx had predicted in June a decline of a “mid-single-digit percentage point.”
FedEx vowed to continue investing in improved service even as the profit outlook weakens. The company is moving to year-round, seven-days-a-week service in January, investing to handle oversize items and taking on last-mile delivery of more lower-cost packages that used to be carried by the U.S. Postal Service.
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