U.S. Economy On The Brink? Both FedEx And Rail Giant Norfolk Southern Warns Of A Sharp Slowdown In U.S. Economic Activities In Coming Months
Management now expects to earn $1.18 to $1.25 per share.
Analysts were looking for $1.64.
Management blames “volume declines in certain markets and lower revenues from fuel surcharges.”
Because railroaders transport a broad array of goods, they are considered extremely important indicaters of the economy.
FedEx lowered its fiscal 2013 profit target on Tuesday, saying earnings could slide as much as 6 percent for the year, as a weakening world economy prompts customers to shift toward lower-priced and slower shipping options.
“Weak global economic conditions dampened revenue growth (and) drove a shift by our customers to our deferred services,” Chief Financial Officer Alan Graf said in a statement.
“The downward revision reflects what has been a very difficult macroeconomic environment in general and a specifically weak environment for air express services,” said Benjamin Hartford, an analyst at Robert W. Baird & Co. “This has been a secular trend and has been more acute recently as corporations face decelerating growth and focus on managing costs.”
How Federal Express Package Shipments Relate to the Economy
– Bloomberg Economics Brief
As you can see, it is now pointing to sharp contraction in economic activities.