FedEx still insists the economy is solid, but it slashed its forecast due to a Global Trade Slowdown.
FedEx Corp on Tuesday slashed its 2019 forecast after Europe’s economy weakened and the U.S. trade row exacerbated a slowdown in China, sending shares in the package delivery company tumbling more than 6 percent after the closing bell.
“Global trade has slowed in recent months and leading indicators point to ongoing deceleration,” said FedEx Chief Financial Officer Alan Graf.
FedEx, which is in the throes of a record-setting winter holiday shipping season, launched a new cost-cutting campaign after its Express revenues took a hit. On Dec. 7, FedEx announced that the CEO of its Express unit was retiring at year-end.
Memphis, Tennessee-based FedEx cut its fiscal 2019 earnings forecast to $15.50 to $16.60 per share from $17.20 to $17.80 per share – before year-end mark-to-market retirement plan accounting adjustments and excluding TNT Express integration expenses.
The new forecast assumes moderate U.S. domestic economic growth and no further weakening in international economic conditions, FedEx said.
Forecast Assumes No Further Weakening
Yeah right.
The economy is anything but solid.
Earning’s Forecast
The FedEx Earnings Forecast is amusing. Nasdaq has not yet adjusted its model to reality.
Rest assured more warnings are coming.
Forward PEs based on lofty estimates may look attractive, but they aren’t.
Expect more warnings, everywhere, piece by piece as FedEx is doing now.
Mike “Mish” Shedlock
Agree with Mish but now that rate hikes arent expected in 2019 the Fed will begin discussing cuts and how to get rates down so that debt can be rolled over. At some point probably in 2020 there will be too much debt and rolling it over even at lower rates wont matter. We are approaching the tipping point folks.
Now the big rumor? Who will get their hands on the Fed’s decision early and make money on it?
Maybe Fedex can get some of those market adjustment payments like the soybean farmers. You know, if they are willing to be trump’s butt boy.
Buy the rumor, sell the news. Depression 2.0 is here.
Competition from Amazon?
Good point. I was seriously thinking that maybe we should give the post office to amazon. They lose money every year and my mailman seems to do multiple routes a day up my street because he missed delivering something. I’m not sure Amazon would want it.
Given that the post office is a part of the constitution, it can’t be given to Amazon, or anyone else, absent a Constitutional Amendment.
“Given that the post office is a part of the constitution, it can’t be given to Amazon, or anyone else, absent a Constitutional Amendment.”
Given that it seems as if Amazon is growing to dominate everything retail, Amazon might be able to buy a Constitutional Amendment.