MW FedEx is the latest company to sound the alarm on the U.S. economy

By Claudia Assis

FedEx cuts profit outlook for the third time in a row

FedEx Corp. late Thursday cut its profit outlook for a third straight quarter, saying that it reflected "continued weakness and uncertainty in the U.S. industrial economy" hitting demand for its business-to-business services.

That weakness continued to pressure FedEx's higher-margin B2B volumes, Chief Executive Raj Subramaniam said on a post-results call with analysts.

The dynamic was most pronounced at FedEx's freight business, where fewer shipments and lower weights continued to hamper results, albeit less than last quarter, the executive said.

"The current environment ... is adding uncertainty to demand," Subramaniam said.

FedEx $(FDX)$ called for fiscal 2025 sales to be flat to slightly down year on year, compared with a December forecast of flat sales. Adjusted profit expectations came down to between $18 and $18.60 a share, versus the previous forecast of between $19 and $20 a share and FactSet consensus of $18.93 a share.

FedEx will also spend less this year, calling for capital spending of $4.9 billion, compared with a previous expectation of $5.2 billion. The priority will be on investments in "network optimization and efficiency improvement, including fleet and facility modernization and automation," the company said.

FedEx shares dropped about 5% in the extended session Thursday, after ending the regular trading day down 0.4%.

FedEx reported adjusted fiscal third-quarter earnings of $4.51 a share on sales of $22.2 billion, which was a mixed bag compared with Wall Street expectations. FactSet consensus called for adjusted earnings of $4.56 a share on sales of $21.9 billion.

During the quarter, FedEx navigated "a very challenging operating environment, including a compressed peak season and severe weather events," Subramaniam said in a statement accompanying results.

Wall Street had grown concerned about FedEx. Besides the extreme weather, the December quarter also included an earlier Chinese New Year and a shift "from Trump Bump euphoria to recession fears by the end of February," Evercore ISI analysts said in a recent note.

-Claudia Assis

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March 20, 2025 17:56 ET (21:56 GMT)

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