FedEx shares fall as dismal forecast fans concerns over Trump tariffs

New York Post

4 days ago

FedEx shares plunged as much as 5% Wednesday after the company revealed a disappointing profit forecast as President Trump's tariffs weigh on global transit.
The package delivery giant said it expects earnings per share of $3.40 to $4 in the current quarter, just slightly lower than forecast expectations of $4.05.
But the underwhelming forecast sent investors fleeing, since the company often acts as a bellwether for several other industries.
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FedEx shares fell Wednesday after the company reported a lower-than-expected profit forecast for the current quarter.
Christopher Sadowski
'FedEx is like the economy's Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength,' said Michael Ashley Schulman, partner at Running Point Capital Advisors.
'Right now, all three are looking sluggish.'
The stock pared back gains from earlier losses, when it plunged about 6% Wednesday morning.
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FedEx executives said they expect tariff policies to continue weighing on US-China air trade. That's a big deal for the company, which is more exposed to China than rival UPS.
Trump initially levied a massive 145% rate on China. In a deal with the nation, he has since lowered it to 30% – but that's still far higher than previous rates.
FedEx is also suffering from Trump's end to the 'de minimis' exemption, which previously allowed shipments worth less than $800 to enter the country duty-free, FedEx Chief Customer Officer Brie Carere said during a post-earnings call.
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The shipping carrier often acts as a bellwether for several other industries.
Christopher Sadowski
Trump argued that Chinese fast-fashion sites like Temu and Shein abused the tax loophole, and that others might have used it to sneak in fentanyl and illicit materials, since 'de minimis' goods were able to skirt around customs checks.
FedEx did not provide a full-year earnings or profit forecast on Wednesday, which is 'quite telling,' according to Russ Mould, investment director at AJ Bell.
'This may result in some consternation in the markets beyond just the fortunes of FedEx itself,' Mould said.
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The company did, however, announce that it plans to carry out $1 billion in cost-cutting reductions in fiscal year 2026.
FedEx's 'cost cutting drive is continuing, but it's clear that it'll face more challenges ahead amid ongoing trade unpredictably,' said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Fear over the impact from Trump's tariffs – as CEO Raj Subramaniam warned that global demand 'remains volatile' – overshadowed FedEx's better-than-expected quarterly earnings.
In the quarter ended May 31, the company reported adjusted earnings per share of $6.07, far above expectations of $5.84.
FedEx posted revenue of $22.22 billion, above projections of $21.79 billion.
Its US daily package volume was up 6% from the year before, and its US ground home delivery volume was up 10%.