FedEx pre-announced their most recent quarterly results ending August 31, 2022 and it’s not good. First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe. As a result of the preliminary first quarter financial performance and expectations for a continued volatile operating environment, FedEx is withdrawing its fiscal year 2023 earnings forecast provided on June 23, 2022. FedEx is also cutting costs aggressively in response to macroeconomic challenges. FDX 0.00 shares crashed 20+% during today’s session. All the major stock indices also went down. SPY 0.00 fell 5% for the week. It was quite brutal.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,” said Raj Subramaniam, FedEx Corporation president and chief executive officer. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”
FFrankly, I am pretty used to all the bad news. 2021 was an up-up-up year. But the market could not go up exponentially forever. The correction/crash was inevitable. Now 2022 has become a down-down-down year. Well, the market can not go down forever. Eventually, we will see light at the end of the tunnel. In the meantime, the tougher environment is an opportunity for investors to readjust their expectations and re-align their portfolio with their goals. It’s also good to see most of the YOLO/FOMO/CRYPTO bets that are basically gambling go away and to see people refocus on long term productive investments.