FedEx has suspended all guidance on any potential future earnings in the light of the current uncertainties regarding the coronavirus pandemic.
Announcing an increase in third quarter global revenues from $17 billion to $17.5 billion and an operating income drop from $984 million to $483 million (owing to TNT Express integration costs), FedEx said it was suspending our fiscal 2020 earnings forecast due to the uncertainty caused by the coronavirus pandemic.
It also warned that there were significant constrains in international air cargo capacity but it was ready to support customers with increased demands for its services.
FedEx chief financial officer Alan Graf said: “To mitigate these near-term headwinds and position the company for future earnings growth, we are attacking costs throughout the company.”
He said this was being done by managing capacity, retiring its oldest and least-efficient aircraft, integrating TNT Express, and lowering its residential delivery costs by having FedEx Ground deliver FedEx SmartPost and certain day-definite FedEx Express packages.
The COVID-19 pandemic is having a significant impact around the world,” said FedEx chief executive Frederick Smith.
“We continue to deliver for our customers and are ready to support increased demand for our International Express export services due to the significant reductions in intercontinental air capacity.
While the global economic impact from recent social-distancing mandates is uncertain, we remain well positioned to assist our customers as they work to manage their supply chains and inventories. We will continue to support efforts to combat the pandemic.”