FedEx cut its guidance for fiscal 2023 after the company, seen as a magnet for global economic growth, said the recent deterioration in business conditions continued into the current quarter. The update, which comes a week before FedEx reports earnings for its fiscal first quarter, sent shares down more than 15 percent in after-hours trading Thursday to their lowest level in more than two years. FedEx posted preliminary results for the quarter to August 31 that were weaker than analysts expected, blaming “global volume softness” that “accelerated” in the final weeks of the quarter. The company said it expects business conditions to weaken further in the second quarter, prompting it to cut its capital spending forecast and withdraw guidance for the rest of the fiscal year. “Global volumes declined as macroeconomic trends worsened significantly later in the quarter, both internationally and in the US,” chief executive Raj Subramaniam said in a statement. “We are quickly addressing these headwinds, but given the speed with which conditions have changed, first-quarter results have fallen short of our expectations.” In its preliminary results, FedEx reported first-quarter earnings of $3.33 a share, down 19% from a year earlier, and well below the $5.14 a share Wall Street had expected. Revenue rose 5 percent from a year ago to $23.2 billion, but was slightly below analysts’ forecasts of $23.6 billion. The company said it expects business conditions to weaken further in the current quarter and forecast revenue of $23.5 billion to $24 billion, with earnings of $2.65 “or more” per share. Wall Street had expected revenue of $24.9 billion and earnings of $5.39 per share. FedEx also cut its forecast for capital spending in the fiscal year to $6.3 billion from $6.8 billion. Shares fell 15.2 percent in after-hours trading to their lowest level since early August 2020.
