Logistics giant FedEx (NYSE: FDX) reported its first quarter 2020 earnings results that missed analysts’ views. The company also lowered its guidance for full-year 2020. FedEx stock was trading down about 7% in the extended trading session.
FedEx reported adjusted earnings of $3.05 per share on revenue of $17.05 billion. The market had expected FedEx to post earnings of $3.17 per share on revenue of $17.09 billion for the first quarter.
On a GAAP basis, FedEx’s earnings dropped to $745 million or $2.84 per share in the first quarter of 2020 from $835 million or $3.10 per share in the prior year quarter.
The results for the first quarter ended August 31, 2019, were negatively affected by the weakening global economic conditions, higher costs and continued mix shift to lower-yielding services. The impact of one fewer operating day and the loss of business from a large customer also negatively impacted Q1 results.
FedEx lowered its earnings outlook for fiscal 2020. The company now projects earnings to be $10.00 to $12.00 per share before the year-end MTM retirement plan accounting adjustment, and earnings of $11.00 to $13.00 per share before the year-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses.
“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” said CEO Frederick Smith.
Yesterday, FedEx announced that shipping rates and surcharges will increase effective January 6, 2020. Shipping rates increased by an average of 4.9% in FedEx Express and FedEx Ground, while FedEx Freight will increase the shipping rate by an average of 5.9%.
FedEx stock has increased 8% so far in 2019 and dropped 32% in the past 52 weeks.