The package delivery company's earnings warning came minutes after trucking and logistics company Con-way Inc (CNW) cut its full-year 2008 earnings outlook.
Memphis-based FedEx estimated earnings of $1.58 per share for its fiscal 2009 second quarter ending November 30. Analysts had expected earnings of $1.51, according to Reuters Estimates.
The company is due to report the results on December 18.
But Fedex also sharply lowered its previously announced fiscal 2009 earnings forecast, to a range of $3.50 to $4.75 per share, from $4.75 to $5.25, as "significantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market."
Deutsche Post AG (DPWGn.DE) unit DHL said last month it would halt its U.S. domestic service as of January 30, with the loss of 9,500 jobs, citing a slowing U.S. economy and an uphill struggle against local behemoths FedEx and United Parcel Service Inc (UPS.N: Quote, Profile, Research, Stock Buzz).
Both UPS and FedEx are considered bellwethers of U.S. economic activity.
FedEx said it has lowered its target for capital expenditures for fiscal 2009 to $2.5 billion from a previously stated figure of $3.0 billion.
Separately, trucking firm Con-way said it was cutting its full-year earnings outlook to a range of $2.20 to $2.35 a share, from a previously announced target of $2.60 to $2.80. The previous target already had been reduced in October from a range of $3.00 to $3.40.
"With three weeks remaining to the end of the year, the company is maintaining a relatively wide range in guidance, due to turbulent market conditions and lack of reliable visibility into an economy which continues to deteriorate," San Mateo, California-based Con-way said in a statement.
Con-way is regarded by analysts as one of the better performing less-than-truckload operators, which consolidate smaller loads into a single truck.
In extended trading, FedEx's stock fell $8.43, or more than 11 percent, to $66.00 after closing up 72 cents at $74.43 on the New York Stock Exchange.
In after-hours trading, UPS shares were down nearly 5 percent, or $2.65, at $55.97, while Con-way stock slid less than 1 percent to $25.60.
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Sources :
- Reuters: FedEx slashes outlook, shares fall 11 percent, December 8, 2008 5:58pm EST
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