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FedEx suspends 2020 profit outlook

Video Credit: Reuters Studio - Duration: 01:13s - Published
FedEx suspends 2020 profit outlook

FedEx suspends 2020 profit outlook

FedEx withdrew its earnings outlook for 2020 due to the coronavirus outbreak.

But as Fred Katayama reports, shares rose in early trading Wednesday as some investors bet it'll benefit from ecommerce boosted by the practice of social distancing.

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Little visibility down the road for FedEx.

At least seven analysts slashed their price targets on the stock Wednesday after the package delivery company withdrew its profit outlook for 2020 due to the fast-spreading coronavirus outbreak.

FedEx also said it would cut costs.

The company said it has submitted a request to the U.S. government for what it called "liquidity support." But even before the pandemic struck, the company was facing challenges such as the loss of a major customer, Amazon, and the integration of its TNT Express unit.

Its quarterly profit fell by more than half.

But some investors see a silver lining, driving up the company's beleaguered shares Wednesday amid another market sell-off.

Revenue rose, beating expectations as more businesses used its international express service to safeguard supply of parts and inventory.

At least one analyst says FedEx could benefit from the practice of social distancing that aims to reduce the spread of the virus because that is fueling ecommerce as more people hunker down at home.

And FedEx executives said the flood of international passenger flight cancellations has boosted its lucrative express business.




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