Lower Profit Forecast Sends FedEx Shares Tumbling; Company Details E-Commerce Work

FedEx shares closed down 12 percent at $162.51 Wednesday after the shipper downgraded its fiscal-year profit forecast by about $2 a share on weaknesses in its European and Chinese businesses. The company expects to spend up to $575 million in severance and other costs for a “voluntary buyout” offer to eligible U.S. employees that ultimately will reap $275 million in annual savings. The new FedEx Extra Hours service offering expands “e-commerce delivery options” for retailers, said Chief Marketing and Communications Officer Raj Subramaniam on a Tuesday evening call on Q2 ended Nov. 30. The service enables participating retailers to fill e-commerce orders well “into the evening” and receive late FedEx Express pickups for next-day local delivery and two-day delivery to “any address” in the continental U.S., said Subramaniam, who becomes FedEx Express CEO Jan. 1. “Retailers can extend evening order cutoff time by five to eight hours, with some as late as midnight.” The company recently launched the service with Best Buy in “multiple” U.S. markets, he said.