📉 FedEx slows down - revised outlook and margin pressure send shares down!

FedEx $FDX, a traditional indicator of the health of the global economy, has rewritten expectations for fiscal year 2025. Shares fell by more than 11 %, the biggest daily drop in two years. The company now expects adjusted earnings between $18.00 and $18.60 per share, having targeted $20 to $22as recently as December .

The deteriorated outlook is due to a combination of several key factors: continued weakness in the U.S. industry, a higher share of low-margin shipments from online platforms like Temu a Shein, the impact of the weather and growing uncertainty caused by import tariffs and geopolitical tensions.

📊 Q3 financial results:
Revenue: $8.05 billion (up year-on-year, but only slightly above estimates)

Adjusted earnings per share: $4.51 (below Wall Street expectations)

Profitability was hit by the shortened season and adverse weather

Full-year revenue outlook: flat to slightly lower year-over-year

📦 B2B vs. e-commerce:
FedEx and rival UPS have both struggled to transform their portfolios in recent years - from traditional B2B (business to business) higher margin shipments to the increasingly dominant e-commerce segment. Shipments from retail platforms are bringing volumes, but are squeezing margins and increasing operating costs. FedEx warns that this change may have long-term structural implications for the entire industry.

📉 Fears of recession and trade wars:
The Trump administration's incoming tariff policy is increasing uncertainty across the supply chain. Manufacturing companies are becoming cautious in planning logistics and investments. This is directly reflected in shipment volumes within US and across borders. Analysts warn that the combination of tariffs and a weak industry are setting the stage for a further slowdown, or even a recession.

🚛 FedEx response:
So the company continues to take austerity measures, aims to save 2.2 billion USD within the fiscal year. 2025. However, in contrast, the company announced the purchase of 8 new cargo aircraft Boeing 777reportedly on favorable terms. A significant strategic shift also took place in December, when FedEx announced the spin-off of its profitable Freightwhich should streamline operations and free up capital for further transformation.

What is your view of the company and the industry?