FedEx cuts full-year results forecast on ‘uncertainty’ in economy, bad weather

FedEx lowered its full-year profit and revenue forecasts on Thursday, as the parcel delivery firm battles stubbornly soft demand and uncertainty in the U.S. industrial economy as President Donald Trump imposes tariffs on trading partners.

“Our revised earnings outlook reflects continued weakness and uncertainty in the U.S. industrial economy, which is constraining demand for our business-to-business services,” Chief Financial Officer John Dietrich said in a statement.

FedEx shares fell 5.3% to $232.29 in after-hours trade, while rival United Parcel Service UPS.N stock shed 1.1%. Those companies are seen as barometers for the global economy since their business touches so many types of businesses.

Both companies have been slashing costs as less lucrative e-commerce delivery demand from companies like Temu and Shein outperforms that of higher-margin shipments between businesses.

The industrial sector includes firms that produce products used to make other goods. It drives significant cargo volume and more profitable deliveries for FedEx and UPS. Many executives in the U.S. transportation industry had been banking on the industrial economy returning to growth this year.

Those hopes appear to have been dashed by new and threatened tariffs from the Trump administration. Experts are also concerned those import levies could spark a recession and trade war that further weakens transportation and delivery demand.

Memphis-based FedEx on Thursday lowered its full-year forecast for adjusted profit to $18 to $18.60 per share. FedEx in December cut that profit forecast for the fiscal year ending May 2025 to $19 to $20 per share, down from its initial target range of $20 to $22 per share.

FedEx also expects revenue for the 12 months ending in May to be flat to slightly down year-on-year, versus its earlier forecast for it to be approximately flat.

For the third quarter that ended on February 28, FedEx reported adjusted profit per share of $4.51. That was up from $3.86 per share last year, but below average analyst estimates of $4.54, according to data compiled by LSEG.

FedEx CEO Raj Subramaniam said the results came as the company was “navigating a very challenging operating environment, including a compressed peak season and severe weather events.”

FedEx and UPS are locked in a fierce battle for market share, which analysts worry could lead to a price war.

FedEx and the United States Postal Service, its largest customer, ended their air cargo contract in September. UPS picked up that business, but in January said it was accelerating a plan to slash deliveries for its largest customer, Amazon.com.

FedEx in December announced long-awaited plans to spin off its profitable Freight division.

FedEx executives said on Thursday that the company remained on track for permanent cost reductions of $2.2 billion for fiscal 2025. CFO Dietrich also said the company had reached agreements to buy eight new Boeing BA.N 777 freighters at “very attractive prices.”