Transportation giant FedEx has reported underwhelming earnings for the past quarter, and it saw the company miss out on analysts’ expectations in terms of revenue and earnings per share. This led the company’s stock to slide by more than 15% on Friday.
FedEx’s revenue for the first quarter of fiscal 2025 came at $21.58 billion, coming short of an estimation of $21.91 billion and marking a slight decrease from $21.7 billion reported in the same period of last year.
The company also reported a net income of $892 million for $3.60 in adjusted earnings per share, down from $4.55 in Q1 of 2024 and almost 25% less compared to the $4.77 per share expected by analysts.
Additionally, FedEx opted to lower its full-year forecast for 2025. Instead of the previous range of $20 to $22 per share, it now expects to have $20 and $21 per share in operating income alongside low single-digit percentage growth in revenue instead of low to mid-single-digit percentage.
FedEx CEO Raj Subramaniam attributed the disappointing quarter results to soft demand in the industrial sector, which represents a major chunk of the company’s business, something he believes is a sign of a weakening U.S. economy.
“The magnitude of the Fed rate cuts yesterday signals the weakness of the current environment,” Subramaniam shared.
The investors quickly bailed on FedEx’s stock via a selloff that sent it down by 15.23%. At Friday’s close price of $254.64 per share, the stock now has marginal gains year-to-date.