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Global Trade: FedEx (NYSE:FDX) Slashes Profits; US and China File Cases Against Each Other With WTO

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FedEx Earnings Dip Signals Weaker Global Trade

On Tuesday, FedEx (NYSE:FDX) -- the world's second largest package delivery company behind United Parcel Service (NYSE:UPS) -- slashed its profit outlook for the current quarter.

From FedEx CEO Frederick Smith:

As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter earnings...Meanwhile, our FedEx Ground and FedEx freight segments performed well, with both improving their year-over-year operating margins. We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes.

Net income fell 1% year-over-year, and the Memphis, Tennessee-based company projects its earning will fall between $1.30 and $1.45 per share in the second quarter, and $6.20 to $6.60 per share for fiscal 2013.

The company previously expected earnings from $1.45 to $1.60 per share, while analysts originally expected earnings to be $1.56 per share, according to Thomson Reuters I/B/E/S. Full year guidance was down from $6.90-$7.40 projected in June.

The hit to FedEx's international air freight business, which accounts for more than 60% of the company's revenue, is being acknowledged as an indicator of a larger global economic slowdown.
No positions in stocks mentioned.
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