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Technology FedEx glides down

FedEx glides down

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After soaring to record highs in January 2018, FedEx stock has tumbled like a package falling out of the back of one of those delivery trucks. The shares are down 40% from their peak. FedEx has been hammered by the slowdown in global economic growth and concern over the trade war with China. It lost its business with Amazon. It faces higher costs by going to seven days a week. Operating margins have sagged from 9% in fiscal 2017 to around 6% for the 12 months that ended in November. Along the rocky ride, FedEx management froze the dividend and repeatedly reduced forecasts of future earnings. Since September of 2018,

FedEx has shaved one-third off its profit forecasts. The most recent cut, just last month, triggered a 10% drop in the stock price. The Memphis, Tennessee-based company attributed the grimmer outlook to disappointing revenue in each transportation division. Online shopping, which translates into a greater share of residential deliveries that are spread out and inefficient, also led to higher expenses. FedEx is trimming its airplane fleet, limiting hiring and investing in technology to boost automation and reduce costs. It’s unclear when those moves will make a big difference in the company’s financial results.

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