Analysts trimmed their profit estimates for FedEx Corp. Friday, a day after the world's second-largest package delivery company provided further evidence of the global economic slowdown.
The Memphis, Tenn., company said Thursday consumers are putting off purchases of electronics and other gadgets from China. While FedEx didn't go so far as to predict another recession in the U.S., the company trimmed its earnings expectations for the year.
FedEx shares extended their decline in premarket trading Friday, falling 62 cents, or 1 percent, to $65.96. The stock tumbled $5.92, or 8.2 percent, to close at $66.58 Thursday.
FedEx and larger rival UPS are closely watched indicators of broader economic health because they ship so many packages between consumers and businesses every day.
In a research note, Jeff Kauffman of Sterne Agee said that despite the company's exposure to the slowdown in Asia and the U.S., FedEx "appears to be handling adversity well." He added that shares, which are down 28 percent in the year to date, already reflect the bad news.
Meanwhile, Citi Investment Research analyst Christian Wetherbee trimmed both his earnings and price targets. "While air cargo data from Asia has been weak, we anticipated package volumes to be more robust," the analyst wrote. His target on the stock is now $87, down from $95, but still implying growth of nearly a third from Thursday's closing price.