Stock fell 4% during after-hours trading after missing estimates
FedEx’s chief operating officer on Tuesday blamed staff problems after a 7% drop in quarterly profit and said a “disrupted labor market” is the biggest issue facing the company.
Raj Subramaniam, executive, used his distribution center in Portland as an example of the challenges, according to Reuters. He added that the facility is operating at 65%, which means the company is spending more to send packages to other hubs for delivery. He said the company expects the issue to continue till the holiday peak. He said that around 600,000 packages are being re-dispatched per day.
The stock fell 4% in after-hours trading after missing projections and also cut guidance for 2022 informed of That company reported adjusted earnings per share of $4.37 billion from $22 billion in sales during the time frame. The magazine reported that Wall Street was expecting $4.88 in earnings per share from sales of $21.9 billion.
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wall street journal informed of that staffing shortages added $450 million to costs, including more overtime pay. The Journal also reported that the supply chain has also been a drain on business, including a lack of parts and congested ports.
The newspaper said the company is looking to offset some of these expenses with higher shipping prices.
Frederick W. Smith, President and CEO of FedEx Corp, said in a statement that the execution of our strategies “continues to drive high demand for our services, despite the disruptive impact of the pandemic on labor availability and global supply chains.”
“I am extremely proud of my team members around the world who continue to transport life-saving vaccines and provide urgently needed supplies to those affected by natural disasters such as Hurricane Ida and the recent earthquake,” he said.