FedEx whiffed on earnings and the stock is sliding
FedEx, the global logistics company, missed significantly on second quarter earnings for its fiscal year 2017.
The company reported adjusted earnings per share of $2.80, against analysts' expectations of $2.91. Revenue came in just a tick above expectations at $14.93 billion versus projections of $14.91 billion.
The company also downgraded its outlook for 2017, shifting projected EPS down to $10.95-$11.45 per share against its previous expectation of $11.85-$12.35 and analysts' projections of $12.15 per share.
The earnings come smack dab in the middle of the busy holiday shipping season, which FedEx expects to be its largest ever. The company said it projects shipping volumes 10% higher than in 2015.
"We are in the home stretch of our peak shipping season, and our service levels are high, thanks to the outstanding efforts of our hundreds of thousands of team members around the world," said CEO Fred Smith in a release accompanying earnings.
According to FedEx CFO Alan Graf, the growth of its FedEx Ground system led to some of the increased costs.
"We are on track to achieve our fiscal 2017 earnings forecast, as we continue long-term investments in our networks,” said Graf in the release. “While these network projects are impacting FedEx Ground’s near-term profitability, the investments will expand capacity, improve service and enhance long-term returns and cash flows."
Following the news, FedEx stock dropped roughly 2.75% as of 4:23 p.m. ET.
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