FedEx says ‘weakness in global trade’ impacting business in fiscal 2020
Global delivery company FedEx warned Tuesday that "macroeconomic weakness and trade uncertainty" could hurt its fiscal 2020 performance.
The cautious outlook came as the Memphis, Tennessee, corporation reported revenue for the fourth quarter, which ended May 31, of $17.8 billion, which met Wall Street forecasts, according to The Associated Press.
FedEx also reported a fourth-quarter loss of $1.97 billion, or $7.56 per share, compared to the year-earlier period when it earned $1.32 billion, or $5.01 per share. Revenue rose 3 percent from the same quarter in the previous fiscal year.
“Our fiscal 2020 performance is being negatively affected by continued weakness in global trade and industrial production, especially at FedEx Express,” Alan B. Graf, Jr., FedEx’s executive vice president and chief financial officer, said in a news release.
The company predicted that the operating income during the 2020 fiscal year for its Ground and Freight divisions would rise as a result of higher revenues, according to the news release. However, the expectation was not as bright for FedEx Express.
"At FedEx Express, macroeconomic weakness and trade uncertainty, continued mix shift to lower-yielding services and a strategic decision to not renew a customer contract will negatively impact operating income," the company said.
The fourth-quarter report comes a day after the company announced it was suing the Trump administration because it cannot police the “millions” of shipments that transit its network daily.
“It’s impossible, even with the fantastic computer systems and compliance investments we made. We simply can’t be the policeman for the U.S. Department of Commerce,” FedEx Chairman and CEO Fred Smith told Fox News’ Bret Baier.
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The shipping giant filed suit in U.S. District Court in the District of Columbia seeking to block the Department of Commerce from enforcing regulations in the Export Administration Regulations (“EAR”) against FedEx.
Smith said the new government regulations create an “impossible burden” on FedEx and common carriers to know the origin and technological makeup of the contents of all the shipments that companies handle each day and whether they comply with the EAR.
Fox Business’ Henry Fernandez and The Associated Press contributed to this report.
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