The prevailing weak economic sentiments globally have
led courier company FedEx Corporation(NYSE:FDX) to cut its earnings forecast on
Tuesday.
The slowdown is expected in the company's express division,
it said. Slowing economic growth worldwide especially in Europe
and Asia have resulted in a shift from overnight air delivery to slower but
cheaper forms of package delivery.
FedEx expects to earn between $1.37 and $1.43 per
share in the fiscal first quarter that ended Aug. 31. That's down from an
original forecast of $1.45 to $1.60 per share. Analysts were expecting $1.56 per share. Shares in the
world's second largest courier company fell 3 percent in after-hours trading.
Apart from FedEx, larger rival UPS has also warned
about the impact of slower economic growth on their results.
Can FDX Rebound
Now? Find Out Here
In July, UPS said customers were worried about what's
in store in the second half of the year. The delivery companies have cut or
reduced the frequency of flights in Asia, as shipments both within the region
and to Europe and the U.S. have slowed.
Revenue grew just 3 percent at FedEx's express
division in the quarter ended May 31. Operating income dropped by $148 million
due to a charge for the retirement of some aircraft, but a 3 percent decline in
package volume also hurt results.
Meanwhile Guidewire Software Inc(NYSE:GWRE)’s shares
jumped in opening session Tuesday as the insurance industry software provider
said that its fiscal fourth-quarter profit beat market expectations.
Shares were up $2.70, or 9.20 percent, to $32.05 in the
opening session.
The company earned $3.5 million, or 6 cents per share,
for the quarter that ended July 31. That's compared with a loss of $1.2
million, or 6 cents per share, in the same period last year.
Total revenue increased 33 percent to $67.6 million
from $51 million on stronger license, service and maintenance revenue.
Should
Investors Buy GWRE After Today’s Gain? Find Out Here
Analysts expected a loss of 2 cents per share on
revenue of $62.4 million.
Guidewire earned $15.2 million, or 25 cents per share,
for the full fiscal year compared with $35.6 million, or 76 cents per share, in
the prior year. Revenue was up 35 percent to $232.1 million.
No comments:
Post a Comment