FedEx Withdraws FY23 Outlook On Weak Q1 Results; Stock Tanks 11%

Shares of FedEx Corporation (FDX) tanked 11% in extended session on Thursday after the company withdrew its full-year 2023 earnings outlook due to a weak first quarter financial performance.

Moving ahead, FedEx said it is withdrawing its fiscal year 2023 earnings forecast due to the preliminary first quarter financial performance and expectations for a continued volatile operating environment.

Previously, the company expected adjusted earnings of $22.50 to $24.50 per share. Analysts currently expect earnings of $22.29 per share for the year.

Further, the company said it expects business conditions to further weaken in the second quarter.

For the second quarter, FedEx is currently expecting revenue of $23.5 billion to $24.0 billion, earnings of $2.65 per share or greater, and adjusted earnings of $2.75 per share or greater. Analysts polled by Thomson Reuters currently estimate earnings of $5.48 per share and revenues of $24.86 billion.

For the first quarter, the company reported a preliminary result, with earnings of $3.33 per share, adjusted earnings of $3.44 per share and revenues of $23.2 billion. This compares to last year's earnings of $4.09 per share, adjusted earnings of $4.37 per share and revenues of $22.0 billion.

Analysts expect earnings of $5.14 per share on revenues of 23.58 billion for the first quarter.

FedEx said its first-quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of about $500 million relative to company forecasts. FedEx Ground revenue was around $300 million below company forecasts.

"Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations," said CEO Raj Subramaniam.

FDX closed Thursday's trading at $204.87, down $0.14 or 0.07%, on the NYSE. The stock further slipped $23.37 or 11.41% in the after-hours trading.

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