FedEx (FDX) abruptly pulled its full-year earnings guidance late Friday and announced major cost-cutting moves. FedEx stock plunged late and UPS (UPS) also tumbled.
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FedEx also announced preliminary results for the quarter ended Aug. 31. FedEx earnings per share fell 21% vs. a year earlier to $3.44, far below views for an 18% gain. Revenue rose more than 5% to $23.2 billion, also missing.
The company was due to report late Sept. 22.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.,” FedEx CEO Raj Subramaniam said in Thursday’s release.
“We are aggressively accelerating cost reduction efforts,” he added. FedEx will shutter 90 offices, defer hiring and cut flights, the release said.
It added: “FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.”
In late trading, FedEx stock tumbled 15% and UPS stock lost 5%.
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