June 25 (Reuters) - FedEx shares fell 5% on Wednesday after the logistics giant forecast first-quarter profit below Wall Street estimates and refrained from issuing an outlook for the year, citing uncertainty around U.S. President Donald Trump's trade policy.
The company's decision to forego guidance rattled investors, given the parcel giant's role as a shipper of consumer goods, at a time when economic data points to slowing growth and trade tensions have left businesses uncertain about the future.
Russ Mould, investment director at AJ Bell, noted FedEx's inability to deliver an outlook for the year "may result in some consternation in the markets beyond just the fortunes of FedEx itself."
Earlier on Wednesday, Pillsbury-owner General Mills forecast weak full-year profit, citing a volatile macroeconomic backdrop.
FedEx, along with rival UPS, is seen as an economic bellwether due to its broad customer base across industries, giving it an early insight into shifts in demand.
UPS shares fell about 2% in early trading, while German peer DHL dropped 1.4%.
J.P. Morgan analyst Brian Ossenbeck said in a note the firm expects FedEx (shares) to underperform given it was the only time the company did not provide an annual outlook over the last 13 years, excluding 2020 during the COVID-19 pandemic.
The biggest hit is from the Trump administration ending duty-free status for direct-to-consumer shipments — valued at less than $800 — from China-linked bargain sellers like Temu and Shein, FedEx Chief Customer Officer Brie Carere said.
The Trump administration in April imposed a tariff rate of 145% on China, before slashing it to 30% a month later.
"FedEx is like the economy's Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish," said Michael Ashley Schulman, partner at Running Point Capital Advisors.
The biggest hit is from the Trump administration ending duty-free status for direct-to-consumer shipments — valued at less than $800 — from China-linked bargain sellers like Temu and Shein, FedEx Chief Customer Officer Brie Carere said.
The Trump administration in April imposed a tariff rate of 145% on China, before slashing it to 30% a month later.
"FedEx is like the economy's Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish," said Michael Ashley Schulman, partner at Running Point Capital Advisors.
Reporting by Rashika Singh and Utkarsh Shetti in Bengaluru; Editing by Shailesh Kuber
Source: Reuters