FedEx Corp. fell nearly 7 percent after the market on Tuesday after it reported earnings and guidance for the second quarter of fiscal 2020 that fell short of Wall Street expectations. After Tuesday’s U.S. stock market, the company reported a second-quarter net profit of $560 million, or $2.13 per share, compared with $935 million, or $3.51 per share, a year earlier. Adjusted earnings per share were $2.51.
Revenue fell to $17.3 billion from $17.8 billion a year earlier.
Analysts surveyed by FactSet had expected earnings of $2.78 per share and revenue of $17.6 billion.
“Fiscal 2020 is a year of significant challenges and changes for FedEx, especially in the just-concluded quarter, as the shipping season is compressed,” Frederick Smith, FedEx’s chairman and chief executive, said in a statement. ”
FedEx said it now expects earnings per share of $9.10 to $10.35, or $10.25 to $11.50 per share, for fiscal 2020, excluding expenses related to the 2016 acquisition of TNT Express and aircraft impairment charges. Neither estimate includes year-end accounting adjustments for retirement plans valued at market value.
However, analysts had expected earnings of $12.09 per share, compared with FedEx’s previous forecast of $11 to $13 per share.
Alan Graf, FedEx’s chief financial officer, said in a statement: “Our adjusted financial results reflect lower-than-expected revenue for each of our transportation sectors, and the continued transition to residential express service has driven spending higher than expected.” “