FedEx is challenged by deteriorating international sales, on account of unfavorable exchange rate moves coupled with global trade tensions.
Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer, indicated that foreign economies’ sluggish growth and international trade disruptions are posing headwinds to the package delivery service company’s overseas revenues.
On Tuesday, FedEx reported its third quarter revenue of $17.01 billion, missing analysts’ estimates of $17.67 billion.
The company’s earnings for the quarter came in at $3.03 per share, which fell short of analysts’ expectation of $3.11 per share (based on Refinitiv poll). Earnings were also lower from the year-ago quarter’s $3.72 per share. Furthermore, the company slashed its full-year 2019 earnings guidance to a range of $15.10 and $15.90 per share, compared with analysts’ forecast of $15.97 (based on Refinitiv data).
According to Graf , FedEx has embarked upon a voluntary employee buyout program to tackle the pressure from slowing international business. Additionally, the company is constraining hiring and curbing discretionary spending, as indicated by Graf.