Sep 16 (Reuters) – The FedEx stock plunges on Friday in trading after the world transport giant withdrew its forecasts and sounded the alarm over weakening consumer demand, hitting the industry around the world.
The US company joined other large global logistics companies, such as Hong Kong’s Cathay Pacific Airways and French carrier CMA CGM, who have noted that consumers are saving to be able to buy essential products, such as gasoline and foodbecause rising prices discourage luxury purchases.
If the losses continue in the session, it would be the worst percentage drop in one day for FedEx, greater than its 16.4% crash on Black Monday in 1987.
A complicated economic outlook
The weak results of FedEx highlight the difficult macroeconomic context, since the high inflation and concern for global growth slowdown they dent shipping volumes, said Victoria Scholar, chief investment officer at Interactive Investor.
However, some analysts believe FedEx’s poor first-quarter results are primarily a company-specific problem.
“Clearly there are doubts about the direction of the world economy, especially in Europe and Asia, but we struggle to see how that explains the entirety of this quarter’s failure,” analysts at Stifel said in a note.
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(Reporting by Medha Singh, Bansari Mayur Kamdar and Kannaki Deka in Bengaluru; Editing in Spanish by Javier López de Lérida)