FedEx (NYSE:FDX) shares fell more than 5% intra-day today after the logistics giant issued a weaker-than-expected profit forecast for the current quarter, fueling concerns about global demand and rising trade tensions.
Despite delivering a better-than-anticipated fourth-quarter performance—posting earnings per share of $6.07 on $22.2 billion in revenue, topping analyst estimates—investors focused on the company’s cautious guidance. FedEx projects adjusted Q1 EPS between $3.40 and $4.00, missing Wall Street’s expectation of $4.06.
The company also withheld full-year earnings and revenue guidance, citing a highly uncertain macro environment. CEO Raj Subramaniam described global demand as “volatile” during the earnings call, while executives pointed to rising trade frictions as another headwind. In particular, the decision to end duty-free status for low-cost shipments from China-linked retailers like Shein and Temu has weighed on profitability.
The results from FedEx, often viewed as a bellwether for economic activity, follow growing business caution amid political and trade uncertainty tied to former President Trump’s renewed tough stance on China. Combined with structural cost cuts of $2.2 billion over the past year, FedEx is trying to offset weaker volumes, but near-term visibility remains limited.
Investors appear to be bracing for a rocky start to the new fiscal year, as external pressures continue to cloud the outlook.
