FedEx Plunges After Cutting Outlook on Trade War, Slowdown
Blaming a weakening global economy, FedEx Corp. sharply slashed its profit outlook in the latest sign that trade tensions are dragging down U.S. corporate titans.
The forecast sent the couriers shares tumbling late Tuesday and signaled deepening trouble for FedEx as the U.S. and China battle over tariffs -- a standoff that has also ensnared manufacturing giants such as Caterpillar Inc. and Deere & Co. FedEx said it would deepen its cost-cutting drive and retire some cargo jets to contend with the diminished expectations.
The global economy continues to soften and we are taking steps to cut capacity, FedEx Chief Executive Officer Fred Smith said in a conference call to discuss earnings. The slowdown is being driven by increasing trade tensions and policy uncertainty, he said.
The shares tumbled 9.4% in late trading to $156.97, wiping out this years gain and spurring declines at rival United Parcel Service Inc. and XPO Logistics Inc., a freight broker. FedEx was already trailing the returns this year of UPS and a Standard & Poor index of U.S. industrial companies.
https://www.bloomberg.com/news/articles/2019-09-17/fedex-tumbles-after-cutting-outlook-on-trade-war-weaker-economy?srnd=premium