chip giant AMD just announced the expected third-quarter performance of the Yuanxun Wall Street . Another bad news came from the US economy's barometer and logistics giant FedEx .
On Friday, local time, the media quoted an internal memorandum as saying that because the volume of parcel delivery is expected to decline during the holiday this year, FedEx Ground, a business unit under FedEx, plans to lower delivery volume expectations.
The above memorandum shows that Paul Melander, senior vice president of FedEx Ground Services, sent a message to 6,000 independent contractors handling delivery and truck transportation earlier this week, informing them that FedEx Ground Services is expected to lower expected parcel delivery volumes. These challenges will reflect the information reflected by customers. Customers expect that in the current environment, orders may decrease during this holiday peak season.
FedEx's new expectations will be announced around October 21. The company did not immediately respond to the above news. However, the company's stock price accelerated during the session, hitting a new daily low, and the intraday decline reached 4%, and the current decline narrowed to less than 2%.
Media pointed out that FedEx ground service handles most of the company's e-commerce express business and contributes more than 40% of the company's operating profit. More than a dozen express contractors told the media that their delivery orders this year have decreased by 5% to 15% compared with the same period last year.
Wall Street News noticed that this was another performance alert from FedEx three weeks later.
About three weeks ago, on September 15, , U.S. stocks , FedEx released preliminary estimates of performance, which was lower than expected. In the third quarter of the Gregorian calendar of fiscal year 2022, the company's operating profit was nearly 30% lower than market expectations and earnings per share (EPS) was 33%, of which FedEx's ground business revenue was about US$300 million lower than the company's expectations. At the same time, the company revoked its fiscal 2023 performance guidance.
FedEx said at the time that the company's poor performance was mainly affected by the adverse impact of weak global sales accelerated in the last few weeks of the reporting period. Its CEO Raj Subramaniam directly warned that
"We are entering a global recession, and the company's data is not a good omen."
Subramaniam pointed out that the decline in global freight volume is the main reason for the company's "very disappointing" performance in the first quarter and the continued fluctuation of the operating environment. He also said that the impact of global freight volume accelerating around August is very far-reaching:
"This is because we reflect the business of everyone else, especially the world's high-value economies." The day after
issued a performance warning, on September 16, FedEx's stock price closed down 21%, the largest single-day drop in the company's 40 years since its listing, and the stock price fell to its lowest point in more than two years since early July 2020.
Because FedEx's performance is closely linked to the vitality of the US real economy, the market often regards its financial report as a barometer of the US economic vitality. FedEx's performance expectations are equivalent to sounding a wake-up call to the US economy. As a result, Deutsche Bank analyst Amit Mehrotra calls the company's withdrawal of optimistic guidance issued three months ago "shocking."
Some comments believe that in addition to the sudden cancellation of fiscal 2023 guidance, FedEx's performance also points to weakness in Asia and challenges in Europe, and it is necessary to take "radical cost reduction" measures such as closing stores and freezing recruitment, which may be the fate of most American companies. FedEx's pessimistic warning for the end of the year-end shopping season also shocked Wall Street.
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