FedEx Warns of Global Slowdown: Expect More Warnings

After hours, FedEx warned of a global slowdown and slashed its global forecast.

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

Comments (9)
No. 1-6
2banana
2banana

Competition from Amazon?

mkestrel
mkestrel

Buy the rumor, sell the news. Depression 2.0 is here.

shamrock
shamrock

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.

George_Phillies
George_Phillies

Now the big rumor? Who will get their hands on the Fed's decision early and make money on it?

Sechel
Sechel

I like the intuitiveness of this indicator. How's it been performing as a forecaster?