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What’s happening: Shares of FedEx Corporation tumbled in extended trading hours on Thursday, after the company released results for its fiscal first quarter.
What happened: The delivery giant reported weaker-than-expected sales and earnings for its first quarter.
FedEx also lowered its guidance for the full year, exerting further pressure on the stock.
How were the results: The Memphis, Tennessee-based company reported a steep decline in profits for the quarter ending August 31.
Why it matters: FedEx saw customers shifting from speedy, higher-priced delivery to slower, cheaper shipping options, which weighed on its overall profitability. This trend also impacted rival United Parcel Service’s results earlier this year.
Demand from the industrial segment was softer than estimates, which significantly impacted the company’s earnings.
FedEx’s Express segment saw US domestic shipping volumes contracting by 3% amid low business-to-business demand.
The company completed an accelerated buyback program worth $1 billion during the latest quarter and has plans of repurchasing another $1.5 billion worth of its common stock in fiscal 2025. FedEx closed the quarter with $5.9 billion in cash on hand.
“Despite a challenging quarter, we remain focused on transforming our network, improving our efficiency, lowering our cost-to-serve, and enhancing our ability to adapt with speed to evolving market dynamics,” CEO Raj Subramaniam said.
Management guided to fiscal 2025 revenue growth in the low single-digit range, compared to their previous forecast of low-to-mid single-digit growth. They also slashed their earnings outlook to $17.90-$18.90 per share, from the previous forecast of $18.25-$20.25 per share.
FedEx also remains on course to integrate its outsourced divisions Ground and Express, as a part of its cost-cutting initiative. Subramaniam said the company is on track to saving $2.2 billion this fiscal year.
How shares responded: FedEx’s shares tumbled 11% to $267.25 in the after-hours trading session, following the release of quarterly results. The stock has jumped 19% year to date.
What to watch: Investors will continue monitoring the overall economic conditions, after the Federal Reserve slashed its benchmark interest rate by 50 bps on Wednesday, which could give a fillip to businesses.
Context: The CAD/USD forex pair edged lower this morning amid strength in the US dollar on Friday.
Details: The Bank of Canada has slashed interest rates at its last three consecutive meetings to 4.25%.
Traders see a more than 50% probability of the BoC cutting rates by 50bps in October. Markets have fully priced in a rate cut by 25bps by December.
Strength in the greenback weighed on the CAD/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 100.65.
A rise in the price of crude oil, one of Canada’s major exports, limited the overall losses for the loonie. WTI crude oil prices rose 0.1% to $72.00 per barrel this morning.
The CAD/USD forex pair slipped to 1.3564 this morning. The S&P/TSX Composite Index had jumped 1.16% to close at 23,866.27 on Thursday, hitting a new record high.
What to watch: Investors await the release of economic data on house price index, retail sales, producer price inflation and raw materials price index from Canada today. Canada’s House Price Index, which rose 0.2% in July, is expected to rise by 0.1% in August.
Analysts expect retail sales in Canada to grow by 0.6% in July, after a 0.3% decline in June. Industrial producer prices, which came in flat in July, are expected to decline by 0.3% in August.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.91%, 1.55%, 2.29% and 1.38%, respectively.
Germany is preparing to announce further military assistance worth around €400 million to Ukraine for its ongoing war with Russia. The news sent the safe-haven US dollar index higher in forex trading this morning.
Japan’s core consumer price index rose by 2.8% year-over-year in August, in-line with market estimates, lending support to the JPY/USD forex pair.
The People’s Bank of China maintained its key lending rates, in-line with expectations, sending the CNY/USD pair higher in forex trading this morning.
UK’s GfK Consumer Confidence indicator dipped to -20 in September, from -13 in the previous month, exerting pressure on the GBP/USD forex pair.
Colombia’s trade deficit widened to $0.963 billion in July, from $0.814 billion in the year-ago month, which sent the COP/USD pair lower in forex trading this morning.
Germany’s producer price inflation, UK’s retail sales and public sector net borrowing, France’s business confidence and business climate indicator, Turkey’s consumer confidence and government debt, Italy’s construction output, Spain’s balance of trade, India’s bank loan growth, deposit growth and foreign exchange reserves, US Baker Hughes crude oil rigs and Baker Hughes total rigs, Eurozone’s consumer confidence indicator, Argentina’s leading economic index, as well as Russia’s consumer confidence.
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