FedEx Warns of Lower Profits Due to Trade Tensions Shares Fall 2025

FedEx Corp. has issued a warning to investors, indicating that its profit for the current quarter will be worse than initially anticipated. The company cited the ongoing trade tensions and the resulting tariffs as the primary factors weighing on global demand, which has significantly impacted its business operations. This announcement comes as a surprise to many, as FedEx typically provides a full-year forecast. However, due to the uncertain economic climate, the company has chosen to withhold guidance for the remainder of the year.

The impact of tariffs on FedEx's operations is particularly pronounced given its extensive exposure to the U.S.-China air trade transit. Executives have expressed concerns that these tariff policies will continue to hinder demand, further complicating the company's ability to predict future performance accurately. The uncertainty surrounding global trade policies has created a challenging environment for businesses reliant on international shipping, and FedEx is no exception.

FedEx's decision to withhold guidance for the rest of the year highlights the significant challenges posed by the current trade environment. The company's inability to provide a clear outlook for the future is a stark reminder of the uncertainty that businesses face in the midst of escalating trade tensions. As the situation continues to evolve, companies like FedEx will need to adapt their strategies to navigate the complexities of the global market and mitigate the impact of tariffs on their operations.

The company’s shares fell as of 9:33 a.m. in New York on Wednesday after FedEx reported quarterly results, extending their slide for the year. The shipping giant’s stock was down in 2025 through Tuesday’s close, while the S&P 500 index rose modestly over that span. Although it typically provides a full-year forecast, FedEx said it would only share its outlook for the current quarter due to the “uncertain global demand environment.” The forecast assumes no further negative developments in global trade dynamics.

“We just simply cannot predict how that is going to play out,” FedEx Chief Customer Officer Brie Carere said on the company’s earnings call. Adjusted earnings in the fiscal first quarter will be $3.40 to $4 a share, the company said late Tuesday. Analysts had projected $4.03 on average. US-China shipments — the company’s most profitable trade route — “deteriorated sharply” in May and volumes are expected to remain under pressure, Carere said.

Trump’s erratic trade policies continue to handcuff the ability of executives to predict where their businesses are headed. That lack of visibility is especially challenging for FedEx — an economic bellwether — since its customers include a broad swath of industries, from manufacturing to consumer goods. Investors were concerned “after management did not provide an initial full-year outlook for the only time over the last 13 years.”

Analysts had already reduced their 2026 profit estimates for FedEx in recent months, worried that weakening consumer confidence and soft industrial demand would overshadow the company’s efforts to slash costs and revamp its delivery network. It’s hard to see profit growing this year “unless there is an overwhelming upcycle.”

Still, there are signs that the company’s long-running push to reduce expenses and combine FedEx’s ground and air shipping networks into a single operation is paying off. The company achieved its goal of cutting $2.2 billion in costs during its most recent fiscal year and expects an additional $1 billion in savings this year. Adjusted earnings were $6.07 a share in the fourth quarter, topping the $5.81 average of analyst estimates. Higher U.S. and international export volumes, price increases and cost reductions provided a boost, while the expiration of its contract along with higher transportation and wage expenses weighed on results, the company said.