Dim outlook for FedEx shares as it warns of economic pain ahead
Ahead of its Q1 earnings next week, Federal Express has issued a stark warning about the US and international economy and has withdrawn its guidance as a result.
![Video poster image](https://cf-images.eu-west-1.prod.boltdns.net/v1/jit/2830693144001/4e87a35c-e53b-49a5-b43b-7da1df14919f/main/1280x720/1m30s176ms/match/image.jpg)
(Video Transcript)
FedEx shares tank
FedEx Corp shares tanked in the post-market session last night, down by more than 15%, after warning that its fiscal first quarter (Q1) results would be hit by a drop in global volumes. As a result, it withdrew its full-year financial forecast for expected results out next week for its fiscal first quarter earnings.
FedEx said it's expected to post earnings of $3.44 a share, well below expectations of an analyst consensus of $5.17. Revenue is expected also to fall short of expectations at $23.2 billion.
Now, according to FedEx, the global slowdown accelerated in August and is expected to continue through the current quarter. So far, the group estimates these headwinds to be responsible for a $500 million fall in revenue with FedEx Express and $300 million fall at FedEx ground.
FedEx chief executive, Raj Subramaniam, said in a statement that global volumes fell as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US. He said that the compan was working to swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below expectations.
FedEx says it will shut some office locations, cut the number of work hours, and consolidate some of its sorting facilities.
FedEx technical analysis
Now this is not a share which trades all-sessions on the IG platform. But let me just show you what happened before the company came through with the close last night so we can work in what a 15% drop looks like.
It was on the way down at one point yesterday, then recovered. But if we are looking now for a 15% fall from yesterday's close in the market now, this is what it looks like, taking us all the way down to these levels down here which would be a level not seen in this chart since August 2020. So when trade gets underway later on for FedEx it will be on the way down.
United Parcel Service Inc is falling in exactly the same fashion. Amazon is one of the companies that fell as a result of this. Now this was all-sessions last night and you can clearly see the stock was down almost 4% all-sessions on the platform last night, reflecting the drop in shares for the drop in expectations at Federal Express.
Also looking for a drop at the start of today's trading European markets for Deutsche Post AG in Frankfurt.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
![](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/ContentImage/Shares global component NA banner.jpg/jcr:content/renditions/original-size.webp)
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices