- 20 December 2018
- Transport / Logistics Services
Blaming weaknesses in European markets, FedEx has cut its profit forecasts for the financial year. In order to readjust to this the logistics giant has set out a cost reduction plan, that includes capacity reductions in its international network.
In a trading statement FedEx reported that in Q2 ending 30 November global revenues hit $17.8bn, up from $16.3bn in the same period last year. Operating income was $1.17bn, compared to $1.12bn in 2017.
“FedEx is in the midst of another record-setting holiday season, and we salute our more than 450,000 team members worldwide for delivering outstanding customer service,” said Fred Smith, chairman and chief executive officer.
“While the US economy remains solid, our international business weakened during the quarter, especially in Europe. We are taking action to mitigate the impact of this trend through new cost-reduction initiatives.”
CFO Alan Graf pointed out that global trade had slowed in recent months “and leading indicators point to ongoing deceleration in global trade near-term.”
“These trends, coupled with the change in service mix at FedEx Express, are negatively impacting the segment’s financial results. We remain committed to actively managing costs with a heightened focus on increasing efficiency across the organisation.”