BackFedEx plummets as forecast withdrawal fans slowdown fears
REFILE-FedEx plummets as forecast withdrawal fans slowdown fears
PremiumShares of FedEx slumped in premarket trading on Friday as the global delivery heavyweight's forecast withdrawal sounded alarm about softening consumer demand and hammered equities in the sector worldwide.
The U.S. firm joined major global logistics peers including Hong Kong's Cathay Pacific Airways and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.
FedEx, considered the bellwether of the global economy and the broader logistics sector, tumbled 19% to $165.67 after it pulled a financial forecast it had issued just three months ago.
If losses hold through the session, it would mark the steepest one-day percentage drop for FedEx, surpassing its 16.4% slump on Black Monday in 1987.
Rival United Parcel Service shed 6.8%, XPO Logistics dropped 11.2% and e-commerce giant Amazon.com slipped 2.8%, while U.S. stock futures were knocked down overnight after FedEx's results.
Across the Atlantic, Germany's Deutsche Post shed 6.3%, London's Royal Mail fell 11.5% and Copenhagen-based DSV dropped 5.7% after the news.
FedEx's weak result highlights the difficult macroeconomic backdrop as elevated inflation and concerns about slowing global growth dent shipping volumes, said Victoria Scholar, head of investment at Interactive Investor.
However, some analysts believe FedEx's dour performance in the first quarter is mostly a company-specific issue.
"Clearly, there are questions about the direction of the global economy, especially in Europe and Asia, but we struggle to see how that accounts for the entirety of this quarter's miss," Stifel analysts said in a note.
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This story has been published from a wire agency feed without modifications to the text.
