FedEx slashes its earnings forecast, blames weak global economy for cut
September 6, 2012, 12:14 am TWN
NEW YORK--FedEx Corp. cut its earnings forecast Tuesday, blaming the weak global economy.
The world's second-biggest package delivery company said the shortfall is primarily in its express division, which moves 3.5 million packages on an average day. That indicates customers have continued to switch from overnight air delivery to slower, cheaper methods. Poor economic conditions in Europe and slowing growth elsewhere, including Asia, have forced the shifts.
FedEx expects to earn between US$1.37 and US$1.43 per share in the fiscal first quarter that ended Aug. 31. That's down from an original forecast of US$1.45 to US$1.60 per share. Analysts were expecting US$1.56 per share, according to FactSet. Shares fell 3 percent in after-hours trading.