In a surprise pre-announcement, FedEx said it’s withdrawing its fiscal year 2023 earnings forecast as a result of the preliminary 1Q financial performance and expectations for a continued volatile operating environment.

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 approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.

Specifically for Q1:

• FedEx prelim 1Q adj EPS $3.44, est. $5.10
• FedEx prelim 1Q Rev. $23.2B, est. $23.54B
• FedEx prelim 1Q Adj. oper income $1.23B, est. $1.74B

As a result of the preliminary first quarter financial performance and expectations for a continued volatile operating environment, FedEx is withdrawing its fiscal year 2023 earnings forecast provided on June 23, 2022.

Additionally, the firm said it was moving to cut costs:

“While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”

As part of these cost-cutting initiatives, FedEx will close 90 office locations, close five corporate office facilities, defer hiring efforts, reduce flights and cancel projects.

“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 Raj Subramaniam, FedEx Corporation president and chief executive officer.

“While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”

FDX is down 14% after hours to its lowest since Aug 2020...

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As @Knowledge_vital noted:

A “horrible, miserable report... It’s a bit strange to hear $FDX speak so negatively following... conference presentations when no one else hinted at an environment like this. .. However,.. investors should assume EPS estimates across the board are at risk.”

Just remember - it's still definitely not a recession!

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