FedEx blames severe winter weather for disappointing performance results

FedEx has revealed they believe their disappointing third quarter results are due to the severe weather experienced from the previous winter. The company has claimed that severe storms were worse than usual within the US, causing them to experience their “toughest winter in which FedEx has ever operated”, as said by Chairman of the company, Fred Smith.

The company’s performance did not meet expectations, meaning that FedEx has now cut their yearly forecast earnings to between 6.55 and 6.80 USD per share. FedEx has said the harsh weather disturbed their operations in the run up to Christmas, revealing that earnings were hit by an approximate $125 million in the third quarter alone.

The US company reported an estimated 40,000 packages per day were affected regarding FedEx Express, with an additional 100,000 affected at FedEx Ground. FedEx’s Chief Financial Officer admitted that the company had its plans “in the wrong place”, even admitting further that they used a substantial amount of overtime in an attempt to rectify the situation. Smith went on to explain that their use of using separate air and ground networks, whilst also using multiple hubs, assisted during this high demanding time of the year.

Regardless of the evident problems they faced, their performance at Christmas did not result in as much negative feedback from the public as expected, especially compared with UPS. Smith also brought to light that social media outlets, such as Twitter, had a big involvement in emphasising poor delivery experiences.