- FedEx Corp. announced a loss of just under $ 2 billion in the fourth quarter.
- The company expects losses next year due to the departure of Amazon as a partner and slowing global economic growth.
DALLAS – FedEx Corp. posted weak quarterly results in its core business with express services and warned Tuesday that its profit in the coming year will be impacted by slowing growth in the global economy and the US decision to abandon a deal with retail giant Amazon.
The supplier reported a quarterly loss of nearly $ 2 billion. However, adjusted for a change in pension plan accounting and other items that the company does not expect, results will be better than expected by Wall Street.
FedEx kicked off a new fiscal year this month, and Chief Financial Officer Alan Graf said the company's performance, particularly on FedEx Express, is hampered by continued weakness in global trade and industrial production.
The company announced this month that it will not renew an air freight delivery agreement with Amazon that expires on June 30. The value of this work was not disclosed, but Amazon made less than 1.3% of its revenue in 2018.
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FedEx is also in a trade dispute between the US and China. On Monday, the company sued the Commerce Department to prevent the enforcement of export regulations restricting shipping to Chinese telecommunications equipment supplier Huawei Technologies. Huawei was recently added to a list of companies that are prohibited from obtaining US technology without a special license from the Department of Commerce.
In the fourth quarter, ending May 31, FedEx reported a loss of $ 1.97 billion, compared to a gain of $ 1.13 billion a year earlier.
Excluding what the company considered a one-off effect, FedEx reported adjusted earnings of $ 5.01 per share. While earnings were lower than $ 5.91 a year ago, they exceeded expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was $ 4.81 per share.
Sales increased 3% to $ 17.81 billion, which was analysted.
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The company's largest business, Express, recorded lower revenues from international priority packages, and the unit's operating income decreased 12%, with a 1% decline in revenue.
FedEx Ground came under rising costs as it switched to a six-day, six-day, year-round schedule. The company plans to work seven days a week from January. The unit's earnings remained unchanged despite 11% higher sales.
FedEx, based in Memphis, Tennessee, reported $ 540 million in revenue for the year, with revenues of $ 69.69 billion.
FedEx shares fell 4.92 USD or 3.1%. to close Tuesday at $ 155.98 before the release of the results. During extended trading after the release of financial results, equities rose $ 1.43 to $ 157.41.
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