FedEx posted quarterly profit that topped market expectations, but warned that US-China trade tensions and non-renewal of an Amazon contract will hurt its fiscal 2020 performance, Reuters reports.
“Our fiscal 2020 performance is being negatively affected by continued weakness in global trade and industrial production, especially at FedEx Express,” the company’s CFO Alan Graf was quoted as saying in a statement.
The package delivery company forecast a mid-single-digit percentage point decline in adjusted earnings for fiscal 2020.
FedEx, which gets about a third of its revenue from outside the US, has drawn Chinese ire over shipping mistakes involving several packages.
Most recently, a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an “operational error.”
For its fiscal fourth quarter ended May, adjusted net income stood at US$1.32 billion, or US$5.01 per share, compared with US$1.60 billion, or US$5.91 per share, a year earlier.
Revenue rose to US$17.8 billion from US$17.3 billion a year earlier, largely due to growth in US volume and higher revenue per shipment at FedEx Freight and FedEx Ground.
Analysts on average had expected earnings of US$4.85 per share and revenue of US$17.79 billion, according to IBES data from Refinitiv.
Earlier this month, FedEx decided not to renew its contract with Amazon for US cargo delivery through FedEx Express, the unit that delivers packages on planes.
FedEx described the decision as a strategic move that will allow it to focus on the broader e-commerce market.
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