FedEx warned that a global recession could be coming, as demand for packages around the world tumbles.
Shares of FedEx plunged 22 percent in early trading after the open Friday after it warned late Thursday that a slowing economy will cause it to fall $500 million short of its revenue target. The weakening global economy, particularly in Asia and Europe has hurt FedEx’s express delivery business. The company said demand for packages weakened considerably in the final weeks of the quarter.
FedEx said it expects business conditions to further weaken in the current second quarter, which runs through November. While global revenue this quarter is likely to be flat compared to a year earlier, FedEx's earnings are expected to plunge more than 40 percent. Analysts had been forecasting a gain in profit.
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