FedEx Warns of Another Hit to Profits

By Paul Ziobro 

FedEx Corp. cut its earnings targets for the fourth time this calendar year, as the delivery giant records less revenue from its Express business and books higher costs tied to delivering more e-commerce packages to homes.

The company is ramping up efforts to control expenses amid a global slump in air shipments and a surge in residential deliveries during a shortened holiday shopping season. Those actions include grounding aircraft, eliminating some international flights and restricting hiring.

The current fiscal year "is a year of continued significant challenges and changes for FedEx, particularly in the quarter just ended due to the compressed shipping season," FedEx Chairman and Chief Executive Fred Smith said in a statement.

FedEx shares fell more than 6% in late trading to $153.34.

FedEx posted a 40% drop in profit for its fiscal second quarter and a 3% drop in revenue. It continues to deal with the loss of Amazon.com Inc. shipping contracts, which totaled $900 million in annual revenue. FedEx said the pricing environment is more competitive as well.

Write to Paul Ziobro at [e-mail]

(END) Dow Jones Newswires

December 17, 2019 16:50 ET (21:50 GMT)

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