FedEx stock experienced one of its steepest one-day plunges in decades. The package delivery company’s shares were down more than 22% on Friday. This follows FedEx’s preliminary first-quarter results that fell short of analyst’ expectations, while the company also indicated caution about earnings.
The company expects its fiscal-first-quarter earnings would be nearly $3.44 a share. That’s significantly below consensus estimates of $5.14 a share. The company cited weakening demand in global shipment volumes. What’s more, FedEx also withdrew its guidance for its full-year profit, citing a volatile environment.
Revenue of $23.2 billion in the quarter also missed analysts’ forecasts of $23.59 billion (based on Refinitiv poll).
The company lowered its forecast for capital expenditure for the year by $500 million to $6.3 billion.
On Thursday, FedEx CEO Raj Subramaniam indicated, in an interview with CNBC’s Jim Cramer, that he sees a global recession around the corner. “I think so. But you know, these numbers, they don’t portend very well,” Subramaniam said in response to Cramer’s question of whether the economy is “going into a worldwide recession.”