By Katherine Hamilton


FedEx is expecting mixed results in its current first quarter as tariffs weigh on its international shipping business.

The package-shipping company said Tuesday it logged some of the biggest declines in shipping across the Pacific Ocean during the recently ended fourth quarter, as China-to-U.S. trade fell sharply after new tariffs were announced in April. FedEx is also cutting some of its European workforce as it continues cost-cutting efforts and looks to navigate uncertain customer demand in the year ahead.

"There's a lot happening outside of FedEx. Trade policies are evolving and trade patterns are changing," Chief Executive Raj Subramaniam said during a call with analysts.

Shares fell 5%, to $218.25, in after-hours trading Tuesday.

FedEx expects revenue to be flat or increase up to 2% in its fiscal first quarter. Analysts were anticipating a sales increase of about 0.6%. Earnings per share are projected to be $2.90 to $3.50, below the $3.83 a share analysts were forecasting.

The company didn't provide a full-year outlook, as it has in the past.

It is anticipating tariffs will add a $170 million cost in adjusted operating income during the current quarter, Chief Financial Officer John Dietrich said. International demand tracked tariff headlines during the quarter, falling in early April after President Trump's Liberation Day announcements, and remained soft through May. Management expects international challenges will continue into the next fiscal year, particularly in China and across the Pacific.

"The macroeconomic environment remains uncertain," Dietrich said. "Our outlook is therefore based on current tariff rates, recent trends we're seeing, as well as that which we're hearing from our customers."

Subramaniam said management is evaluating trade patterns and prepared to alter routes and capacity commitments if demand shifts. That evaluation is focused on Asia, Latin America and Europe. FedEx shared details about its European layoffs in June 2024.

Whether the Memphis, Tenn., company hits the higher end of its revenue range will depend on how strong demand is within the U.S., management said. Domestic volumes held up well in spite of tariffs, with parcel services increasing 6% in volume in the fourth quarter.

Overall, average daily volume increased 5%, to 16.8 million packages during the quarter, which ended May 31.

Profit was $1.65 billion, or $6.88 a share, compared with $1.47 billion, or $5.94 a share, a year earlier. Stripping out certain one-time items, adjusted per-share earnings were $6.07, ahead of the $5.82 forecast by analysts, according to FactSet.

Revenue rose 1%, to $22.22 billion. Analysts surveyed by FactSet forecast revenue of $21.74 billion.

FedEx is about two years into an ambitious cost-cutting plan, which it launched amid demand challenges related to high inflation. It said Tuesday it aims to hit $1 billion in annual savings this year. During the fourth quarter, it retired 12 aircraft as part of the cost-cutting efforts.


Write to Katherine Hamilton at katherine.hamilton@wsj.com


Corrections & Amplifications

This item was corrected on June 26, 2025 to show that FedEx shared details about its European layoffs in June 2024. An earlier version incorrectly said management would share details about the layoffs this month.

(END) Dow Jones Newswires

06-24-25 1858ET