FedEx is really worried about trade and the global economy

FedEx expects global trade disputes and an economic slowdown could severely hurt its business next year....

Posted: Dec 19, 2018 2:58 PM
Updated: Dec 19, 2018 2:58 PM

FedEx expects global trade disputes and an economic slowdown could severely hurt its business next year.

The company dramatically cut its profit outlook for the full fiscal year, which ends May 30, lowering it by 7% to 10%. It had just raised that forecast three months ago.

Business and industry sectors

Business, economy and trade

Companies

FedEx Corp

Freight transportation

Shipping and courier services

Transportation and warehousing

Globalization

Trade and development

Although FedEx's US business remains strong, it says its international business, especially in Europe, weakened significantly over the last three months.

"China's economy has weakened due in part to trade disputes," said CEO Fred Smith in a call with investors.

To control costs in a looming downturn, FedEx announced Tuesday evening that it will offer buyouts to its US employees and will scale back hiring plans. It is also considering a buyout offer for international staff.

The company's new outlook sent shares of FedEx (FDX) down 7% in premarket trading Wednesday. FedEx's stock was already down more than 25% this year ahead of the news.

FedEx is performing well at the moment. The company said it expects to have record shipments during the current holiday period. Revenue and profit for its fiscal second quarter, which ended November 30, both rose. But its profit margin was slightly narrower than a year ago.

The company did not say how many jobs it expects to eliminate, but the cut should be deep enough to cut costs by $225 million to $275 million per year. FedEx has more than 450,000 employees worldwide, about 25,000 more jobs than it had at the end of May.

"Of course, we expect overall FedEx employment to increase over the next several years, again, assuming moderate economic growth," said Smith. But he said by offering buyouts now will help the company improve productivity.

Another key to improving productivity is greater use of advanced technology, including accounting bots, legal system analytics and predictive artificial intelligence, said Smith.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 455783

Reported Deaths: 6166
CountyCasesDeaths
Hennepin945441502
Ramsey40698749
Dakota33623354
Anoka31398368
Washington20579237
Stearns18111190
St. Louis14006251
Scott1221199
Wright11811107
Olmsted1083075
Sherburne831270
Carver705639
Clay660684
Rice624774
Kandiyohi558772
Blue Earth549533
Crow Wing490678
Otter Tail464968
Chisago460438
Benton423788
Winona394948
Douglas379766
Nobles374847
Mower374429
Goodhue358163
Polk330760
McLeod328647
Beltrami316148
Morrison314645
Lyon306139
Becker289439
Itasca287843
Isanti286143
Carlton284443
Steele279510
Pine270515
Freeborn254723
Todd233730
Nicollet230538
Brown218634
Mille Lacs215745
Le Sueur214416
Cass210824
Meeker201533
Waseca193316
Wabasha17483
Martin172026
Roseau166517
Hubbard151138
Redwood141327
Houston140314
Dodge13974
Renville138540
Chippewa133232
Cottonwood129118
Fillmore12778
Wadena120818
Rock112012
Aitkin111533
Faribault110116
Sibley11017
Watonwan10698
Pennington101016
Kanabec99818
Pipestone97223
Yellow Medicine95016
Murray9137
Jackson87310
Swift84718
Pope7485
Stevens7078
Marshall70415
Clearwater68814
Lake66415
Lac qui Parle66116
Wilkin63510
Koochiching60810
Lincoln4912
Big Stone4703
Unassigned43968
Grant4388
Norman4268
Mahnomen4167
Kittson37420
Red Lake3204
Traverse2623
Lake of the Woods1981
Cook1160

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 312194

Reported Deaths: 4433
CountyCasesDeaths
Polk46975465
Linn18114279
Scott15900172
Black Hawk14123243
Woodbury13145181
Johnson1231752
Dubuque11651159
Pottawattamie9182115
Dallas910872
Story883538
Cerro Gordo474372
Webster473377
Warren461539
Sioux460457
Clinton459168
Marshall432262
Buena Vista397230
Muscatine396578
Des Moines395543
Plymouth353670
Wapello351798
Jasper333359
Lee326932
Marion310853
Jones275250
Henry269131
Carroll258934
Bremer250448
Crawford235824
Washington224133
Boone223517
Benton213950
Mahaska198637
Jackson195332
Tama190959
Dickinson189229
Kossuth180944
Delaware176536
Clay173021
Wright167624
Fayette166324
Hamilton162530
Buchanan162324
Winneshiek161020
Harrison158762
Hardin157831
Cedar155819
Clayton153949
Butler152324
Page148115
Floyd141936
Cherokee140327
Mills138517
Lyon137933
Poweshiek135424
Hancock132424
Allamakee131530
Iowa128022
Madison124210
Calhoun12379
Grundy122828
Jefferson122425
Winnebago122329
Mitchell117137
Louisa116430
Cass115343
Chickasaw113812
Appanoose113040
Sac112815
Union111723
Emmet111332
Humboldt107819
Shelby106427
Guthrie104624
Franklin103618
Unassigned10210
Palo Alto92611
Montgomery89224
Keokuk86426
Howard85919
Monroe82620
Clarke8199
Pocahontas78711
Ida76430
Davis70421
Adair69720
Greene6977
Monona68418
Lucas66910
Osceola65011
Worth6224
Taylor6009
Fremont5276
Van Buren50515
Decatur4994
Ringgold45511
Audubon4258
Wayne42021
Adams3023
Rochester/St. Mary'S
Partly Cloudy
12° wxIcon
Hi: 18° Lo: 9°
Feels Like: 12°
Mason City
Partly Cloudy
11° wxIcon
Hi: 20° Lo: 9°
Feels Like: -1°
Albert Lea
Partly Cloudy
10° wxIcon
Hi: 16° Lo: 9°
Feels Like: 0°
Austin
Partly Cloudy
12° wxIcon
Hi: 16° Lo: 10°
Feels Like: 3°
Charles City
Cloudy
12° wxIcon
Hi: 20° Lo: 10°
Feels Like: 0°
Cold and dry through Friday
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Gov. Walz unveils state budget proposal

Image

St. Charles starts season strong

Image

The threat of cyber-crime remains powerful

Image

Tuesday's local highlights and scores

Image

Just for Kix's "virtual" Winter recital

Image

New grant available for Iowa bars and restaurants

Image

Is hydrogen the future of fuel in Minnesota?

Image

Gov. Walz unveils two-year state budget proposal

Image

Pandemic impact on youth suicide

Image

Bernie Sanders Mittens

Community Events