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Investing.com - Shares in FedEx (NYSE:FDX) shed more than 10% of their value in early U.S. trading on Friday after the parcel delivery service cut its full-year profit and revenue guidance.
In a statement, CFO John Dietrich said the reduction was due to "continued weakness and uncertainty in the U.S. industrial economy" that is weighing on demand for its business-to-business services.
The comments come as concerns rise that the industrial sector, which includes firms that make products used to manufacture other items and is a key driver of FedEx deliveries activity, could be impacted by President Donald Trump’s tariff plans. CEO Raj Subramaniam warned that the operating environment was "very challenging" and marred by "a compressed peak season and severe weather events."
FedEx slashed its full-year forecast for adjusted profit per share to a range of $18 to $18.60, down from its previous income guidance for the fiscal year ending in May 2025 of $19 to $20 a share. That forecast itself was a reduction from the initial target range of $20 to $22 per share.
Revenue at Memphis-based FedEx is also tipped to be flat to slightly down year-over-year, compared with an earlier estimate that it would be approximately flat.
FedEx announced third-quarter adjusted earnings per share of $4.51 on revenue of $22.2 billion. Analysts polled by Investing.com anticipated EPS of $4.61 on revenue of $21.92 billion.
"FedEx Freight segment operating results decreased during the quarter due to lower fuel surcharges, reduced weight per shipment, and fewer shipments, partially offset by higher base yield," FedEx said.
"[The] [l]owered fourth quarter outlook feeds negative market narrative on slower macro growth in 2025 given U.S. tariff uncertainty; nonetheless, with the Freight spin on track by mid next year, the continued merger of Express and Ground networks as well as pricing gains support a favorable long-term outlook," analysts at Barclays (LON:BARC) said in a note to clients.
(Yasin Ebrahim contributed reporting.)