FedEx Corp outlined cost cuts of up to $2.7 billion after falling demand hammered first-quarter profits, but analysts grilled company executives with questions in an earnings call about whether steps such as parking planes and shuttering some offices were too little too late.
The company reported that earnings per share fell 21.3% for the quarter ended Aug. 31, in line with the warning it delivered last week. It blamed a rapidly deteriorating global economy and the CFO later said he expects the weak trends to persist across most regions for the rest of the current fiscal year.Analysts and investors were skeptical - in large part because revenue increased 5.5%.
The company said it also would suspend some Sunday deliveries, trim variable incentive compensation meant to motivate and retain workers, close certain package sorting centers, and delay some projects. Still, Lenz said the company expects weak trends "will persist across our major geographies" and will be "driving our cost takeout initiative for the fiscal year."
"They're still not giving guidance for the year. However, they definitely are giving a lot more detail in terms of the plan," Katz said.
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