FedEx shares slide as trade turbulence hits demand, profit forecast
FedEx shares fell on Wednesday after the logistics giant forecast current-quarter profit below expectations, pressured by U.S. tariffs and President Donald Trump's move to revoke duty-free status on certain consumer shipments from China.
Shares of FedEx were down six per cent in premarket trade, while rival UPS fell about one per cent. German peer DHL also dropped nearly two per cent.
'The global demand environment remains volatile,' said CEO Raj Subramaniam during an earnings webcast, as the company failed to provide full-year earnings and revenue forecasts, pointing to uncertainties surrounding U.S. trade policies.
FedEx, along with rival UPS, is seen as an economic bellwether due to its broad customer base across industries, giving it an early insight into shifts in demand.
Russ Mould, investment director at AJ Bell, noted FedEx's inability to deliver an outlook for the year felt 'quite telling.'
'This may result in some consternation in the markets beyond just the fortunes of FedEx itself.'
The Trump administration in April imposed a tariff rate of 145 per cent on China that intensified a global trade war, before reducing it to 30 per cent in May. With FedEx having more exposure to China than UPS, executives said they expect tariff policies to continue weighing on the U.S.-China air trade transit.
The biggest hit is from the Trump administration ending duty-free status for direct-to-consumer shipments, valued at less than US$800, from China-linked bargain sellers like Temu and Shein, FedEx Chief Customer Officer Brie Carere said. 'FedEx is like the economy's Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish,' said Michael Ashley Schulman, partner at Running Point Capital Advisors.
The company's dour outlook overshadowed a better-than-expected profit for the fourth quarter that ended May 31, as cost cuts and improved export volumes helped push operating margins higher.
FedEx's 'cost cutting drive is continuing, but it's clear that it'll face more challenges ahead amid ongoing trade unpredictably,' said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
(Reporting by Rashika Singh and Utkarsh Shetti in Bengaluru; Editing by Shailesh Kuber)
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- CTV News
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Although Liberty believes, in light of the experience of their respective officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in the forward-looking statements and information in this press release are reasonable, undue reliance should not be placed on them because the parties can give no assurance that such statements will prove to be correct. Such statements and information reflect the current view of Liberty. There are risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There are a number of important factors that could cause Liberty's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of the parties; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses; and general development, market and industry conditions. 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Globe and Mail
17 minutes ago
- Globe and Mail
Silver Finally Confirms Platinum's Take
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