FedEx Corp. late Tuesday cut its fiscal 2024 revenue forecast, saying it now expects a single-digit year-on-year revenue decline instead of flat revenue.
The revision, included in its fiscal second-quarter financial results, sent shares plunging more than 8.5% in early after-hours trading.
The company (NYSE: FDX) upped its full-year guidance for diluted earnings per share, now saying it will come in at a range of $15.35 to $16.85 per diluted share from $15.10 to $16.60 per diluted share.
For the quarter, revenue of $22.2 billion was down $600 million from the year-earlier period, as the company continued to grapple with sluggish demand. Adjusted operating income rose 17% to $1.42 billion due to efficiency improvements and a more profitable revenue mix. Adjusted net income came in at $1.01 billion from $820 million.
FedEx Express, the company’s air and international unit, posted lower operating income due to lower revenue. The revenue drop was a result of reduced demand, lower delivery surcharge revenue and a shift toward lower-yielding services.
FedEx Ground, the company’s U.S. ground parcel delivery unit, posted higher operating income due to higher volumes and yield improvement.
FedEx Freight, the company’s less-than-truckload unit, posted an increase in operating income despite a decline in revenue due to fewer shipments.