FedEx reported weaker-than-expected third-quarter earnings and revenue after the closing bell on Tuesday, and cut its full-year guidance. Shares fell more than 4 percent in after-hours trading.
Despite a strong U.S. economy, FedEx said its international business weakened during the second quarter, especially in Europe. FedEx Express international was down due primarily to higher growth in lower-yielding services and lower weights per shipment, Graf said.
To compensate for lower revenue, Graf said FedEx began a voluntary employee buyout program and constrained hiring. It is also “limiting discretionary spending” and is reviewing additional actions.
FedEx shares have dropped roughly 27 percent in the past year, lagging the XLI industrial ETF‘s 1 percent decline.
The U.S. and China remain locked in an ongoing stalemate on trade tariffs. On Tuesday, there were multiple reports about progress on negotiations between the world’s two largest economies. According to Bloomberg, some U.S. officials fear that China is reneging on certain trade concessions.