FedEx Corporation reported a profit loss of more than 21.00% in its fiscal first-quarter financial report due to falling demand and economic headwinds.
During its earnings call, the transport company outlined cost cuts of up to $2.70 billion following constrained demand, hammering Q1 profits.
It ended Thursday’s session in the green territory by rising 0.84% to $154.54 per share but is forecasted to decline by 1.00% to $153.00 on Friday.
For the quarter ending August 31, the entity reported that its earnings per share plummeted by 21.30%, in line with its warning in the previous week.
Due to the rapidly deteriorating global economy, the firm’s chief financial officer expects that weak trends will persist across most regions for the rest of the current fiscal year.
Meanwhile, FedEx committed to repurchase $1.50 billion of its common stock, which includes $1.00 billion in the current quarter.
Furthermore, the entity stated that it booked $300.00 million in Q1 savings and said that it aims to cut expenses by $700.00 million in the second quarter.
Additionally, the company will suspend some of its Sunday deliveries, trim variable incentive compensation that was meant to motivate and retain workers, close certain package sorting centers, and delay some of its ongoing and future projects.
Regarding the business’ revenue, FedEx announced its plans to raise the average rates by 6.90% starting January 02 next year.
Last week, the Tennessee-based firm said that its adjusted earnings per share in the fiscal first quarter dropped to $3.44 from $4.37 a year earlier, while its revenue rose to $23.20 billion from $22.00 billion.
Moreover, executives pulled their full fiscal year forecast due to the lingering macroeconomic weakness in Asia, services challenges in Europe, and soft revenue in its ground delivery unit in the United States.