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June 20, 2019 12:30 PM, EDT

FedEx May See Lackluster Results Lingering Into Next Year

FedEx Truck Scott McIntyre/Bloomberg News

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FedEx Corp.’s pains are far from over. Expectations from its upcoming fiscal fourth-quarter results already have hit rock bottom, and now analysts say its entanglement in the prolonged U.S.-China trade war may dampen the outlook for the next year as well.

“Given several macro-overhangs (trade war, U.S. industrial economy, eurozone softness, etc.), we wouldn’t be surprised to see a fairly wide EPS guidance range,” Raymond James analyst Patrick Tyler Brown wrote in a note to clients. The analyst said the recently announced dividend for FedEx’s fiscal first quarter was the first time since June 2009 that the payout did not increase, and wondered if it provided a “telling sign” for sluggish guidance.

FedEx is due to report fourth-quarter numbers June 25, after the market close. Analysts on an average expect adjusted earnings of $4.88 a share, on revenue of $17.81 billion, according to Bloomberg data.

While the results may be disappointing, some say the market already has factored that in. FedEx shares are down nearly 34% over the past 12 months.

“The weak fundamental outlook for FedEx is more than priced into the stock,” Sanford Bernstein analysts wrote in a note June 20. “Based on our read of sentiment, nothing FedEx says next week is likely to make the stock work.”

However, the company still has enough levers to pull, the analysts added, and “earnings should be up mid-single digits in fiscal 2020.”

FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.