One of the Biggest Companies in the World is Plunging — Fast

FedEx (FDX) made quite a mess.

Shares are down more than $15 to $147 a share on horrendous earnings, and a forecast that’s not sitting well with investors.  Its second quarter net income of $560 million, or $2.13 a share fell from the $935 million, or $3.51 a share posted a year earlier.

Revenue fell to $17.3 billion from $17.8 billion year over year.

Analysts were looking for $2.78 EPS on revenue of $17.6 billion.

“Fiscal 2020 is a year of continued significant challenges and changes for FedEx, particularly in the quarter just ended due to the compressed shipping season,” said Frederick Smith, FedEx chairman and chief executive, as quoted by MarketWatch.

But wait, there’s more good news – well, for FDX shorts.

The company then turned around and forecast fiscal 2020 EPS of $9.10 to $10.35, which is below analyst expectations for $12.09.  

“Our revised guidance reflects lower-than-expected revenue at each of our transportation segments and higher-than-expected expenses driven by continued mix shift to residential delivery services,” said Alan Graf, FedEx’s chief financial officer.

At the moment, FDX is down $15, which took about 95 points off the Dow Transports.

Technically, FDX is now a falling knife.  It just plunged below triple bottom support dating back to late October 2019.  From here, we could see a near-term test of support around $137.80. From that level, we may be able to make arguments for a dead cat bounce.

At the moment, FDX is a disaster, which is pitiful during the holiday season.