FedEx shares slumped by the most in three months after the shipping giant reported a 40% plunge in its quarterly profit. Memphis-based FedEx blamed higher costs, a shorter holiday shipping season and its decision to cut ties with online shopping giant Amazon for the poor second-quarter performance. FedEx severed ties with Amazon earlier this year, saying it wouldn’t make ground or air deliveries for the online shopping giant.
Then this week, Amazon temporarily banned its third-party sellers from using FedEx’s ground service to ship to its Prime members, citing concerns about whether the deliveries would show up in time for Christmas. The package delivery company also cut its earnings expectations for the year. CEO Fred Smith called the current fiscal year one “of continued significant challenges and changes for FedEx.” Shares tumbled 10% Wednesday.