FedEx misses expectations

Source: Dukascopy Bank SA


The global shipping company has reported lower than expected quarterly profits. In addition, FedEx reduced its annual income expectations. As a result of the news, the company's stock price started Wednesday's trading with a gap down of 12.08%.

In general, FedEx earnings increased by 23% to $1.01 billion or $3.99 per share. However, markets expected the earnings per share to be at $4.136. The issue is that larger income per share was already priced into the stock price. News of lower earnings are causing a price adjustment to the downside.

Moreover, the event spilled over into other stocks. Namely, if one shipping company has failed to meet expected profits, markets assume that other have experienced the same issue. Due to this reason United Parcel Service stock price declined by 3.29%.

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