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FedEx Q2 Profit Tops View, But Cuts FY Outlook; Shares Down

Package delivery giant FedEx Corp. (FDX), Tuesday reported an increase in profit for the second quarter, as revenues increased. Both earnings and revenues trumped estimates. However, shares slipped 6% in extended trading session after the company lowered its full year 2019 outlook.

Memphis, Tennessee-based FedEx's second-quarter profit rose to $935 million or $3.51 per share from $775 million or $2.84 per share last year.

Adjusted earnings for the quarter were $4.03 per share, up from $3.18 per share last year. On average, 24 analysts polled by Thomson Reuters expected earnings of $3.94 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter rose to $17.8 billion from $16.3 billion last year. Wall Street analysts had a consensus estimate of $17.75 billion.

"FedEx is in the midst of another record-setting holiday season, and we salute our more than 450,000 team members worldwide for delivering outstanding customer service," said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. "While the U.S. economy remains solid, our international business weakened during the quarter, especially in Europe. We are taking action to mitigate the impact of this trend through new cost-reduction initiatives."

Being global transportation companies, the performance of shipping giants like FedEx and its rival United Parcel Service Inc. (UPS) are considered a strong barometer of overall consumer attitude and economy.

Looking forward to the full year 2019, adjusted earnings are projected to be $15.50 to $16.60, down from the prior forecast of $17.20 to $17.80 per share. Analysts currently estimate earnings of $17.33 per share.

FDX closed Tuesday's trading at $185.01, up $2.82 or 1.55%, on the NYSE. The stock, however, slipped $11.25 or 6.08%, in the after-hours trade.

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