Slowdown in Trade, Customer Shift to Cheaper Services Hit Shipper
Updated September 18, 2012, 2:15 p.m. ET
Not a pretty picture. This article states that, "We see the [U.S.] economy not improving from here," FedEx Chief
Financial Officer Alan Graf said Tuesday. He noted that its outlook for
growth in U.S. gross domestic product next year has been given "a
significant haircut"—to 1.9%, from an anticipated 2.4% just three months
ago. Its forecast for global GDP growth next year was cut to 2.7% from
3% previously."
Mr. Fred Smith, FedEx's CEO blamed "policy choices" in the U.S., China and Europe for
causing global trade to decelerate even faster than GDP, with U.S.
stimulus efforts adding to the pressure on fuel costs by pushing
investors into commodities.
The company lowered its full-year earnings view, now expecting between
$6.20 and $6.60 a share, down from an already disappointing forecast of
$6.90 to $7.40 in June. For its current quarter ending in November,
FedEx forecast per-share earnings of between $1.30 and $1.45, below the
consensus estimates of $1.67 from analysts surveyed by Thomson Reuters.
What could Fred Smith be planning to adjust business in this difficult Chinese market?
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